Comparison of two milk pricing systems and their effect on milk price and milk revenue of dairy farms in the Central region of Thailand

A study was conducted to investigate determinates of how milk pricing system, farm location, farm size, and month and year affected farm milk price (FMP), farm milk revenue (FMR) and loss in FMR of dairy farms in the Central region of Thailand. A total of 58,575 milk price and 813,636 milk yield records from 1034 farms were collected from November of 2004 to June of 2006. Farms were located in the districts of Muaklek, Pak Chong, Wang Muang, and Kaeng Khoi. A fixed linear model was used to analyze milk price of farms. Two pricing systems were defined as 1 = base price plus additions/deductions for milk fat percentage, solids-non-fat, and bacterial score, and 2 = same as 1 plus bulk tank somatic cell count (BTSCC). Farm size (small, medium, and large) was based on the number of cows milked per day of farms. Results showed that FMP were lower (P < 0.05) in pricing system 1 than pricing system 2. Most small farms had higher (P < 0.05) milk prices than medium and large farms across both pricing systems. Large farms lost more milk revenue due to deductions from bacterial score and BTSCC than small and medium farms.