Milk Price- Please read Mod note in post #1

blackdog1

Farmer Ed wrote:

It is a sad reality all the same that farms that once we're able to support to families now can't even support one. Working two jobs is not. easy. Most people would consider a 39 hour week as enough.

Best farms I've visited have father and son working on the farm milking 120-150 cows and both wife's working.. better get those families started early.....

Farmer Ed

blackdog1 wrote: »

Best farms I've visited have father and son working on the farm milking 120-150 cows and both wife's working.. better get those families started early.....

I suppose what ever makes people happy. Probably the most financially secure farmer I know had all is borrowings paid off when he cashed in his wife's life insurance policy. Life's not a race, sometimes your ahead sometimes your not.

Farmer Ed

German ministers urge Merkel to support dairy farmers @agrilandIreland http://www.agriland.ie/farming-news/german-ministers-urge-merkel-support-dairy-farmers/

The history of Europe seems to have always been the the Germans usually get their way.

kowtow

Farmer Ed wrote: »

German ministers urge Merkel to support dairy farmers @agrilandIreland http://www.agriland.ie/farming-news/german-ministers-urge-merkel-support-dairy-farmers/

The history of Europe seems to have always been the the Germans usually get their way.

Hmm.. well not quite always...

Farmer Ed

kowtow wrote: »

Hmm.. well not quite always...

OK let me rephrase that. In the history of the EU. That said in Germany as elsewhere agricultural is no longer the dealbreaker it used to be. Very unpredictable times ahead I would think.

tanko

Is it true that the cost of production in Germany is 46c/litre?

Milked out

Could well be but when they publish those figures they like most bar us tend to include land and labour etc

Farmer Ed

Milked out wrote: »

Could well be but when they publish those figures they like most bar us tend to include land and labour etc

What is the average cost of production here if the cost of land, labour and loan repayments were taken in to account?

I doubt if the Germans are that much less efficient than us?

visatorro

tanko wrote: »

Is it true that the cost of production in Germany is 46c/litre?

For beer maybe!

pedigree 6

tanko wrote: »

Is it true that the cost of production in Germany is 46c/litre?

It's 40c/litre for liquid milk in this country.
According to the fmp group.

whelan2

pedigree 6 wrote: »

It's 40c/litre for liquid milk in this country.
According to the fmp group.

This goes back to the other thread, where do they get theor figures from. I did my profit monitor and granted my own labour and loans are not included but I dont know were the 40cpl came from , that would be double my costs(without my labour and loans.....)

Water John

Did not read the detail on the 40 cent, but it was the Liquid Milk Producers got it done by an accountancy. It included wages. An effort was made to be realistic Not pretend low figures.

alps

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Water John

And then every one else use that figure to hit us over the head with.
Clowns saying our costs were 19/20 cent per litre.

Farmer Ed

alps wrote: »

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Top post In Ireland we place no value on a farmers time. I go in and out to a lot of small businesses in another life and you don't just walk in and expect the boss to drop everything and look after you. Yet how many people still just drive in to a farmers yard and expect a farmer to drop everything

€15 an hour might seem like a lot but when you include overtime and weekend pay. It probably isn't too far of the mark as to what you could expect to earn working simular hours off farm. Also there is a reason why people get paid extra for working anti social hours.

rangler1

Farmer Ed wrote: »

Top post In Ireland we place no value on a farmers time. I go in and out to a lot of small businesses in another life and you don't just walk in and expect the boss to drop everything and look after you. Yet how many people still just drive in to a farmers yard and expect a farmer to drop everything

€15 an hour might seem like a lot but when you include overtime and weekend pay. It probably isn't too far of the mark as to what you could expect to earn working simular hours off farm. Also there is a reason why people get paid extra for working anti social hours.

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

rangler1

Water John wrote: »

And then every one else use that figure to hit us over the head with.
Clowns saying our costs were 19/20 cent per litre.

At least the intervention price is close to that, from what i remember it was only about 60% of the costs of beef production

Sam Kade

rangler1 wrote: »

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

All true, there will be a mass exodus of small/medium size farmers down the line.

WheatenBriar

Sam Kade wrote: »

All true, there will be a mass exodus of small/medium size farmers down the line.

If that's the case,I don't see the point in 100 cow farmers continuing
When I was in UCD many many moons ago one of my lecturers told me ,an Ag lecturer displaying an ignorance of his field,sub 100 weren't viable
Do you know what it is,it's all nonsense
Europe should have ignored the Ukraine too and we'd have been near a 30 base price building markets in Russia but the pc brigade interference has enhanced an unnecessary extra markets head ache

Farmer Ed

Sam Kade wrote: »

All true, there will be a mass exodus of small/medium size farmers down the line.

If that is true and Ranglers views ate widely shared in Ifa. Not much point in most farmers paying in to Ifa any longer. A bit like paying In to a pension fund when you know you will not live long enough to claim the pension.

rangler1

Farmer Ed wrote: »

If that is true and Ranglers views ate widely shared in Ifa. Not much point in most farmers paying in to Ifa any longer. A bit like paying In to a pension fund when you know you will not live long enough to claim the pension.

Its called evolution ( A gradual process in which something changes into a different and usually more complex or better form.) I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

Milked out

Sam Kade wrote: »

rangler1 wrote: »

No one owes us a living, watching BBC news at the moment, they were interviewing a policeman who said he used to be a sheep and dairy farmer.
People have to actively get out there and improve their lot if they're not happy....farming isn't compulsory,we have to accept farmers are going the way of the small shopkeepers of the last twenty years.....older generation only doing it for therapy.
Eu agri budget is static now and every euro that's going into the industry that is intervention, ie storing milk powder and selling at discounted prices, is diverting money away from farmers pockets, so insisting on flooding the market with milk is speeding up the demise of all farmers.
But then what else is new

All true, there will be a mass exodus of small/medium size farmers down the line.

I'd say this will happen even if milk price was at 30c currently. The demographic of the farmer population will.ensure it. Two lads at the end of their careers sold their herds last year within 3 miles of here as no successor. One at drystock the other contract rearing. There will be more to follow as with them the downturn was coincidental. Now the current downturn could accelerate it but may also delay it as these lads may not have the debt or family pressures any more so will wait for uplift in order to get best value for their stock

Farmer Ed

rangler1 wrote: »

Its called evolution I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

Rangler I'll be grand. There is still a few gravy trains running. Just a matter of getting on board one of them. I'd be open to advice from someone with experience.

Anyway back to milk price Should we be using the same method as the German's when calculating cost of production?

kowtow

Farmer Ed wrote:

Anyway back to milk price Should we be using the same method as the German's when calculating cost of production?

There's a teagasc 2011 report which I have linked previously on this thread giving all figures both methods for eu and world.

We're only competitive when land + labour is excluded. With them included we're quite far down the table. I never understood why this report had been written but was never quoted.

Buford T. Justice XIX

alps wrote: »

I've seen some German COP's done...

It includes 2 very important figures...own labour and opportunity cost on the land. If you are renting in land at €200/acre then your own land will.be costed in at this price. They also put in the amount of hous that are worked by the farmer and family labour and this time is assigned a charge equivalent to what it would cost you to replace this time. It is typically costed in at €15/hour.
The end result shows up a number of kpi's

Family entrepreneurial profit...ie the profit you make above your time and equity investment

It works out how much an hour you are actually earning.

Break even point 1....cost at which the farm can operate without paying self or family for lab ou r or land (survival)

Break even point 2.....cost where own labour, land investment is covered

I look at these 2 figures as
Break even 1......The cows get fed
Break even 2......The farmer gets fed...

In Ireland we continue to work with BEP 1 only.

Eating every day is overrated anyway...

Farmer Ed

Buford T. Justice V wrote: »

Eating every day is overrated anyway...

http://www.collective-evolution.com/2013/07/04/a-man-has-not-eaten-or-drank-any-liquids-for-70-years-science-examines-him/

atlantic mist

http://ec.europa.eu/agriculture/milk-market-observatory/pdf/eu-raw-milk-prices_en.pdf

peripheral countries most effected, 5c a liter average difference between uk and ireland...huge opportunities for our product in eu we cant enter almost ever market with a 4/5c price advantage why are we targeting oceanic region??

FMP report was laughable and bolstered my option of that accountancy firm and teagasc, the accountancy firm leaves out any single farm payment while teagasc leave out labor, opportunity cost of labor and opportunity cost of labor. neither are realistic figures last model teagasc farm i was on had husband wife two kids and a student working all full time, great eprofit until you took out 4 wages and then it didnt look like much of a business at all

Why cant they seem to do a full analysis to see what is the actual cost of a liter in ireland be interesting as id imagne were in between the us and nz system if all farmers were included and not the teagasc/fdc sample, we have animals who can react to grain and grass as opposed to only one of the two

i was reading the target 2020 committee is made up of all the ceo from our processing facilities....guess it was a processors great plan as opposed to a plan for primary producers

are fmp going to have to fill liquid quota after loosing tesco contract? how are strath goin to manage liquid milk contract lost to glanbia....was only a matter of time before they targeted their customer base thats how they roll bulldoze ye out of the way....but wait a year for dust to settle first avoiding bad pr

stanflt

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

alps

stanflt wrote: »

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

Great stuff Stan....that will give you a very clear assessment of how you are fixed with current milk prices. Doing that exercise also gets rid of the foolish argument we have at profit monitor meeting over systems and cow type and per litre profit...
I would suggest you are positioned at the lower end of the spectrum so well done....I feel most run from 28 to 34 while most of the Europeans are 39 to 42....

Would be great if more knew this figure for themselves, besides counting on teagasc and farm organisations to tell them if they are making money or not..

20silkcut

rangler1 wrote: »

Its called evolution ( A gradual process in which something changes into a different and usually more complex or better form.) I suppose, stick your head in the sand and maybe it'll go away,
Your income has been protected for thirty years and i suppose in a sense it's like you went to sleep for those thirty years and woke up last year, look around you through those eyes and how many businesses are gone, pubs, post offices, farms taken over gravy train dairy farmers, even the sugar factory, you're going to suffer all that evolution in two years if you're lucky

There was 100,000 dairy farmers in Ireland in the mid 70's.
There is less than 20,000 now. What you described has happened anyway regardless of quota.

cute geoge

stanflt wrote: »

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

Reading your posts all this time back ,i would consider you would be at least in the top 20% dairy farmers profits wise .Imagine the cost of production of farmers with new parlours,buildings and machinery . I am sorry to think but there will be a lot of big dairy farming casualties and they probably will bring down a lot other farming related business as well

Farmer Ed

cute geoge wrote: »

Reading your posts all this time back ,i would consider you would be at least in the top 20% dairy farmers profits wise .Imagine the cost of production of farmers with new parlours,buildings and machinery . I am sorry to think but there will be a lot of big dairy farming casualties and they probably will bring down a lot other farming related business as well

I agree. I think people with borrowings are going to find it most difficult.

This 15k of a low cost Eu loan that is being looked at will probably act as a short term measure for now as a means of helping to clear off bills with co ops and merchants Long term the farmer will still be left holding the baby.

yosemitesam1

stanflt wrote: »

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

If you had an average 5-6000 litre cow would you think your cop would be much higher?

jaymla627

Farmer Ed wrote: »

I agree. I think people with borrowings are going to find it most difficult.

This 15k of a low cost Eu loan that is being looked at will probably act as a short term measure for now as a means of helping to clear off bills with co ops and merchants Long term the farmer will still be left holding the baby.

Australian government bringing in a loan scheme to sub dairy farmers to the tune of 350 million euros, that's going to help support a nice little bump in production their/keep dairy farms in business.....
With only 1.6 million cows out their it will sub suppliers to the tune of over 200 a cow, with political inference now rife through the EU/America/and now Australia with proping up prices it's growing ever more likely that the sharp correction in supply needed through farmers exiting the industry simply isn't going to happen, handouts like that probably inflict more harm then good as they help keep supply up/marginal suppliers in business for a while longer and tag on even more debt to farms...
The more I think about it, the only lifeline left to pull prices back up would be a widespread global drought that wipes out russian/Ukraine/American crops with another bumper harvest predicted worldwide that's wishful thinking

Buford T. Justice XIX

Well, lads and lassies, it's no use complaining that the figures used don't add in a wage for the farm without delivering a figure for use on the farm that can be used across all farms.

It's not an easy figure to come up with.

A farms drawing needs change dramatically over the course of a working life.

A young farmer starting off has little need for drawings, probably living at home and only needing money for his car and a few pints.
A married farmer must take a mortgage out as well and probably money for raising the kids as well even if the OH is working.
And older farmer will be near enough having the mortgage paid off but will have to take a big chunk of change for education over a decade or so for college education.
An older farmer is back again to drawing little again except for a pension and some wages for a child working on the farm again.

What figure do you put on each and how do you average them out?

Or do you take a figure, X, for drawings which might bear no relationship to actual needs and use it despite different farm sizes and enterprises?

stanflt

yosemitesam1 wrote: »

If you had an average 5-6000 litre cow would you think your cop would be much higher?

Yeah because my feed cost is only 5.5cpl and I'd have fixed cost over 300k litres less resulting in break even price of 35 based on 100k drawings

Farmer Ed

Buford T. Justice V wrote: »

Well, lads and lassies, it's no use complaining that the figures used don't add in a wage for the farm without delivering a figure for use on the farm that can be used across all farms.

It's not an easy figure to come up with.

A farms drawing needs change dramatically over the course of a working life.

A young farmer starting off has little need for drawings, probably living at home and only needing money for his car and a few pints.
A married farmer must take a mortgage out as well and probably money for raising the kids as well even if the OH is working.
And older farmer will be near enough having the mortgage paid off but will have to take a big chunk of change for education over a decade or so for college education.
An older farmer is back again to drawing little again except for a pension and some wages for a child working on the farm again.

What figure do you put on each and how do you average them out?

Or do you take a figure, X, for drawings which might bear no relationship to actual needs and use it despite different farm sizes and enterprises?

I'm sure German farmers have simular issues but they seem to be able to come up with a formula. The fact is you time has a value. The question is are you been properly paid for your time?

alps

Buford T. Justice V wrote: »

Well, lads and lassies, it's no use complaining that the figures used don't add in a wage for the farm without delivering a figure for use on the farm that can be used across all farms.

It's not an easy figure to come up with.

A farms drawing needs change dramatically over the course of a working life.

A young farmer starting off has little need for drawings, probably living at home and only needing money for his car and a few pints.
A married farmer must take a mortgage out as well and probably money for raising the kids as well even if the OH is working.
And older farmer will be near enough having the mortgage paid off but will have to take a big chunk of change for education over a decade or so for college education.
An older farmer is back again to drawing little again except for a pension and some wages for a child working on the farm again.

What figure do you put on each and how do you average them out?

Or do you take a figure, X, for drawings which might bear no relationship to actual needs and use it despite different farm sizes and enterprises?

Drawings have nothing to do with COP...

The labour charge is for the amount of hours worked which signifies the cost it would be to replace you.

If you can work your farm doing 5 hours a day, it will naturally have a smaller labour charge than a farm requiring 15 hours a day.

What's left over is your entrepreneurial profit....

But drawings are different...you could have drawings while the farm is making a loss...The concept of drawing should be removed from COP....The labour figure should only have to do with requirement to get the job done.

visatorro

stanflt wrote: »

Lads I was just doing my real cost of production last night- I'm lucky I've no borrowings except a repayment of 1200 per month that will be finished in 15 months time- I've no machinery finance either- I've 60 land rented in and I put 180 land charge on my own- including drawings and tax etc its 27pl

Super going.
What will you do when loan is paid if you don't mind me asking?
Do accountants not tell lads to always have abit of debt to avoid tax? Maybe I'm missing something.

jaymla627

stanflt wrote: »

Yeah because my feed cost is only 5.5cpl and I'd have fixed cost over 300k litres less resulting in break even price of 35 based on 100k drawings

working back on your figures I assume your sending in circa 1.2 million litres, taking 100k drawings/ 5.5 cl feed costs/36k rental costs (200) acres that would mean your total costs less feed drawings and rental are sub 12 cent a litre, pretty amazing figures given you have expanded your herd considerably and are carrying a lot of replacement stock

Milked out

Drawings come out of the wage you take from the business so are one in the same I'm. if there is profit over and above that it is there to reinvest in the business or save for downturn or give yourself a "bonus" or whatever. Even if the avg ind. wage was added in just to cover that in order to have a figure across all farms why not include it and state it. Having cop's stated without the main labour cost or land included is rediculous given the way it's thrown around the media

Buford T. Justice XIX

alps wrote: »

Drawings have nothing to do with COP...

The labour charge is for the amount of hours worked which signifies the cost it would be to replace you.

If you can work your farm doing 5 hours a day, it will naturally have a smaller labour charge than a farm requiring 15 hours a day.

What's left over is your entrepreneurial profit....

But drawings are different...you could have drawings while the farm is making a loss...The concept of drawing should be removed from COP....The labour figure should only have to do with requirement to get the job done.

Again, another variable added into the figure.

I spend my week looking after c 100 cows and 50 ewes and their replacements and it takes the full week.

A lad I know well works the same hours with 18 cows and replacements.

I just think a figure of around 40k, a good weekly wage, would be a better figure to add to all full time farms instead of splitting hairs on a figure.

I don't think it's as easy to determine a figure to use as some are making out.

Water John

It has to be a per hour rate. One is calculating the reality of COP, not some notional figure. Only that way, by standardising how its done can you evaluate how you are performing.
In many ways capital invested and hours worked interact with one another.
So a loan to do something may reduce your hours worked. That is one of the consequences of the investment. Classic being, extending a milking parlour.

kowtow

Buford T. Justice V wrote: »

What figure do you put on each and how do you average them out?

Or do you take a figure, X, for drawings which might bear no relationship to actual needs and use it despite different farm sizes and enterprises?

Yes, same as in any other industry.

You take a sensible figure for someone who can do the job - a skilled herdsman, experienced milker - whatever - and you stick with that.

Ideally it's a figure which scales if you add manpower to the costings. It doesn't have to be enough to keep you in caviar and cocaine (if that is your thing), or so little that you'd be eligible for income support - but at least with some sort of an hourly / daily labour figure you aren't pretending that cows will milk themselves.

I suppose if you had to define it it's the annual wage which would pay someone to do the daily time consuming work, rather than the strategic management.

You still have profits / losses to pay for the bigger things in life...

Edit: note that a farming enterprise is supposed to return a profit in respect of the risks taken, as well as the normal payment for labour consumed (just as you pay a contractor whether or not the crop is profitable)... the profit should be net of the land charge, in other words if you are dairying and made less profit, after paying yourself a wage, than you could have realistically rented out the land at then you are making a loss. It may be that in some years of a cycle this is the norm, but it's still as well to know what the figure is.

stanflt

visatorro wrote: »

Super going.
What will you do when loan is paid if you don't mind me asking?
Do accountants not tell lads to always have abit of debt to avoid tax? Maybe I'm missing something.

Debt doesn't avoid tax- relief can be got from cap ex which has been.significant here over the last ten years- most of it done thru cash flow which in one way is keeping us afloat

keep going

Tbh ye are wasting alot of time talking about this.the only thi g that matters is that you can pay your bills and support your family.all those figures are only for comparison and whether you include land charge or a labour charge isnt going5o be the difference between survival and going bust

Farmer Ed

keep going wrote: »

Tbh ye are wasting alot of time talking about this.the only thi g that matters is that you can pay your bills and support your family.all those figures are only for comparison and whether you include land charge or a labour charge isnt going5o be the difference between survival and going bust

Only to a point if you can earn more money by doing something else and getting rent from your land every year Then maybe that could be a better way of supporting your family. That's why you have to include labour and land costs even more important if you are leasing land as land cost in a year like this could be an immediate killer

kowtow

keep going wrote: »

those figures are only for comparison and whether you include land charge or a labour charge isnt going5o be the difference between survival and going bust

Don't agree at all - I wish people wouldn't assume that proper P&L budgeting is for comparison - that's the last thing it's for.

The purpose of a P&L is to understand the inherent profitability or otherwise of a business. It's for decision making.

Failing to include a labour or land charge in a pro forma budget would suggest that one could expand ad infinitum, with a milk price of about 25-30c / litre... which would be a critical error if at some point you expected either to be paid for your own labour or to gain a return on (or acquire more) land.

keep going

Farmer A has a cop of 28 cent but he has his allowed for wages and land rent.farmer B is paying rent and wages to someone else .at milk price of 28 cent who goes bust, they both have the same cop

rangler1

kowtow wrote: »

Don't agree at all - I wish people wouldn't assume that proper P&L budgeting is for comparison - that's the last thing it's for.

The purpose of a P&L is to understand the inherent profitability or otherwise of a business. It's for decision making.

Failing to include a labour or land charge in a pro forma budget would suggest that one could expand ad infinitum, with a milk price of about 25-30c / litre... which would be a critical error if at some point you expected either to be paid for your own labour or to gain a return on (or acquire more) land.

Anyone that expects to get land rent and paid for labour in farming is too long protected by milk quota and should seek help,
Discussing whether to include it or not is just a bit of willy waving...are dairy farmers really creaming (pun) it and can include it without going into a negative figure, if they are they could stop the incessant whingeing at least