North of Italy - Milk Production Cost
We have taken samples of farms on the plain producing milk destined to respectively Parmigiano and Grana Padano and you could easily note the variety of factors determing the milk production cost.

The analysis, carried out by CRPA - Research Centre for Animal Production, Reggio Emilia (Emilia Romagna Region), provides with:
  • the description of the costs affecting the final price of dairy products
  • a comparison among Farms that focus their activity on High Quality Products

Sistema Informativo Parmigiano Reggiano - CRPA

Farms (on the plain) producing milk transformed into Parmigiano Reggiano
Statistics 2005 2006 2007 2008
a) Number of farms / n.24302027
b) Average milk production per farm / year / kg712333839542840826838656
c) Average cows number per farm / n.83103111117
d) Average milk production per cow /year/ Kg8296805272927168
    Average fat content %3.623.683.593.42
    Average protein content %3.313.343.253.12
e) Labour productivity index (kg of milk production per hour)102968785
f) Forage land (ha)57596554
Returns (VAT included) €/100kg % €/100kg % €/100kg % €/100kg %
1 Milk returns38,1989,7342,0286,0039,4786,9240,0386,91
2 Cattle returns2,666,253,076,281,864,102,034,41
3 Subsidies (crops, slaughter…)1,663,903,096,323,076,763,086,69
4 Other returns (milk quota rent…)0,050,120,681,391,012,220,922,00
A Total Returns 42,5648,8645,4146,06
Costs (VAT included) €/100kg % €/100kg % €/100kg % €/100kg %
5 Cattle purchase1,513,111,372,770,721,260,010,02
6 Feed compound and forage purchase12,5825,9111,7023,6814,1724,7116,1327,82
7 Variable costs due to forage production (seeds, fertilizers…)1,643,381,292,611,522,651,202,07
8 Machinery (upkeep, amortization, rents)3,807,834,118,324,006,974,848,35
9 Fuel, lubrificant, energy, water2,986,143,266,603,526,142,474,26
10 Buildings (upkeep, amortization)3,126,433,276,624,437,724,557,85
11 Vet costs, medicins and insemination1,473,031,472,981,813,161,753,02
12 Insurance, taxes2,905,972,665,381,612,811,472,54
13 Other costs ( management)0,531,090,921,860,811,410,711,22
14 General costs (membership fee, telephone costs…)0,651,340,581,170,921,601,722,97
B Direct Costs 31,1864,2130,6362,0033,5158,4334,8560,12
15 Total land cost (based on land rent cost)3,116,402,885,833,776,573,395,85
16 Labour cost (family and employees labour…)11,9824,6712,7825,8714,8525,8914,0624,25
17 Capital cost (buildings, machineries, cattles…)2,294,723,116,305,229,105,679,78
C Production factor costs 17,3835,7918,7738,0023,8441,5723,1239,88
D Total Costs (B + C) 48,5649,4057,3557,97
Profit ¹ (A - D) -6,00-0,54-11,94-11,91
1) Farms are usually managed by families that make contribution in kind (land, building...), equity contribution and provide with labour activity. That's why the profit shown above has to be analysed mainly as a return on items such as land, labour and capital costs (please see above item C-Production factor costs).
Source: CRPA - Reggio Emilia
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Farms (on the plain) producing milk transformed into Grana Padano
Statistics 2005 2006 2007 2008 2
a) Number of farms / n.1517810
b) Average milk production per farm / year / kg119308311390001429768823270
c) Average cows number per farm / n.13312315495
d) Average milk production per cow /year/ Kg8861897090368666
    Average fat content %3.73.833.693.72
    Average protein content %3.283.453.373.38
e) Labour productivity index (kg of milk production per hour)121121146115
f) Forage land (ha)54557235
Returns (VAT included) €/100kg % €/100kg % €/100kg % €/100kg %
1 Milk returns36,8384,7337,2582,5238,1082,3843,0282,75
2 Cattle returns2,776,372,716,002,705,843,166,08
3 Subsidies (crops, slaughter…)3,838,814,5910,174,399,494,127,92
4 Other returns (milk quota rent…)0,040,090,591,311,062,291,693,25
A Total Returns 43,4745,1446,2551,99
Costs (VAT included) €/100kg % €/100kg % €/100kg % €/100kg %
5 Cattle purchase0,691,630,661,490,000,000,230,44
6 Feed compound and forage purchase9,7623,0211,0925,0811,9925,2414,8528,57
7 Variable costs due to forage production (seeds, fertilizers…)1,343,161,693,821,743,661,663,19
8 Machinery (upkeep, amortization, rents)3,347,883,227,283,888,175,2310,06
9 Fuel, lubrificant, energy, water2,315,452,796,312,835,962,975,71
10 Buildings (upkeep, amortization)2,666,282,686,063,036,384,298,25
11 Vet costs, medicins and insemination1,754,131,713,871,753,682,384,58
12 Insurance, taxes2,505,902,144,843,126,570,831,60
13 Other costs ( management)1,262,971,814,091,392,931,723,30
14 General costs (membership fee, telephone costs…)1,533,611,703,841,142,401,713,29
B Direct Costs 27,1464,0229,4966,6930,8764,9935,8568,98
15 Total land cost (based on land rent cost)2,696,353,006,784,509,472,735,25
16 Labour cost (family and employees labour…)10,6925,229,1720,747,9616,768,0815,55
17 Capital cost (buildings, machineries, cattles…)1,874,412,565,794,178,785,3110,22
C Production factor costs 15,2535,9814,7333,3116,6335,0116,1231,02
D Total Costs (B + C) 42,3944,2247,5051,97
Profit ¹ (A - D) 1,080,92-1,250,02
1) Farms are usually managed by families that make contribution in kind (land, building...), equity contribution and provide with labour activity. That's why the profit shown above has to be analysed mainly as a return on items such as land, labour and capital costs (please see above item C-Production factor costs).
2) Up to 2007 survey data regarding milk production cost with milk destined to Grana Padano cheese had taken samples of farms on the plain in Lombardy region; since 2008 survey data have taken samples of farms in Veneto region (please note that farm size in Veneto region is smaller and with a less forage land available that farms in Lombardy). Both Lombardy and Veneto regions are located on the plain, in the northern of Italy and are the main producing regions of cow's milk in Italy.
Source: CRPA - Reggio Emilia
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