THE REAL PRICE OF DESI MILK
Dr Prashant Yogi unpacks the hidden economics and herd
biology behind India’s indigenous dairy farm
India’s dairy sector continues to rely heavily on milk from indigenous breeds—cows and buffaloes uniquely suited to the country’s diverse agro-climatic conditions. After twentyfive years in dairy farming, including eight years studying HF and Jersey breeds and more than a decade working extensively with Indian breeds, the author brings together practical observations and financial insights to explain the true Production Cost of Indian Breed Milk (PCIBM). This article draws on farm-level experiences, monthly audits, and biological data that matter for both commercial dairy farmers and gaushalas.
Indigenous Breeds: The Backbone of Indian Milk Production
India produced 239.30 million tonnes of milk in 2023–24. Nearly 59% of this comes from indigenous and non-descript animals. Indigenous cows contribute about 11.36% of total production, while indigenous and non-descript buffaloes together account for roughly half of the country’s milk supply. These numbers highlight the central role of native breeds in sustaining India’s dairy economy.
Milk production from indigenous breeds grew by an impressive 44.76% in 2023–24. Their rising importance stems from resilience, low disease susceptibility, adaptation to local environments, and long productive life. While cross-breds offer higher per-animal yield,
Indian breeds provide sustainability and valuable byproducts that reduce overall production cost.
The PC–PM–SC Logic Behind Dairy Operations
Every organised industry operates on a simple financial sequence: **Production Cost (PC)** leads to **Profit Margin (PM)**, which finally determines the **Selling Cost (SC)**. Dairy farms and gaushalas are no exception. Since selling prices differ from region to region and farm to farm, understanding how production cost is constructed becomes essential for achieving profitability. A structured financial review at the end of each month helps identify where money is spent and where deviations occur.
What Determines Production Cost?
Fodder and Feed
Fodder expenses fluctuate with season, rainfall, water
availability, nutrient quality, energy content, and local supply. Green fodder costs typically rise during festive periods and dry months. Dry fodder follows similar patterns, influenced by harvesting cycles and transport availability.
Cattle feed and oil cakes form a major portion of the input cost. Prices vary with protein and fat levels, quality, and credit terms. Small changes in feed composition can significantly alter per-litre production cost.
Mineral Mixture
Mineral mixtures differ widely in purity and composition. High-quality mixtures may cost more but reduce longterm health issues and improve yield consistency.
Labour and Salaries
Labour includes the owner or family members, manager,supervisors, and both skilled and unskilled workers.Their efficiency has a direct impact on productivity. In large herds, labour mismanagement can raise production cost sharply.
Water and Medicines
Water must be available in sufficient quantity and with appropriate quality. Poor-quality water can quickly reduce yield and increase veterinary problems. Indigenous breeds usually require fewer medicines, but preventive healthcare remains essential to keep veterinary expenses under control.
Distribution Costs
Distribution is often an overlooked factor. Transport, packaging, delivery routes, and logistics coordination can quietly raise operational expenses if not monitored carefully. Beyond Milk: Additional Income Streams Indian breed dairy farms have strong potential to diversify revenue. Cow dung and urine can generate substantial income — sometimes between Rs.10,000 and Rs.20,000 per cow per year—through value-added products. Many dung-based and urine-based items, including phenyl, have strong FMCG potential. Ghee, buttermilk, and similar value-added milk products often fetch better margins than raw milk. Agro-tourism and farm training programmes add another layer of income while promoting awareness of Indian breeds. Month-End Financial Audit: A Discipline That Saves Money A monthly financial audit gives farmers a transparent picture of real expenditure. It typically includes costs related to fodder, feed, mineral mixtures, salaries, distribution, electricity, water, vaccinations, deworming, and consultant fees. Loan repayments are then added to determine the total expense. Income from milk, milk products, dung products, urine products, and training programmes is recorded.
separately. The difference between income and expenditure determines profit or loss. Regular financial audits help pinpoint wastage, control cost, and maintain financial stability.
Biological Audit: The Hidden Determinant of Cost
Financial data alone cannot explain a farm’s performance. Biologicalefficiency plays a major role in determining production cost per litre.
A Biological Audit (BA) examines the proportion of milking versus non-milking cows, pregnancy ratios, the number of bulls and bullocks, the age profile of heifers, daily milk yield, and annual health issues. A farm with too many non-productive animals will naturally have a higher per-litre cost. Regular BA reviews allow farmers to correct herd imbalances and improve reproductive management.
Case Study: A Gir Cow Farm in Bhilwara, Rajasthan
A 200-cow Gir farm in Bhilwara conducted a detailed PCIBM analysis in March 2025. The per-litre cost was calculated at Rs.77, comprising Rs.42 for feeding, Rs.13 for labour, Rs.6 each for maintenance and medicines, Rs.2 for packing, Rs.6 for distribution, and Rs.2 for miscellaneous expenses. The case illustrates that with disciplined cost monitoring, Indian breed farms can maintain realistic and competitive production costs. Conclusion: Training and Planning Are Essential Long-term sustainability in Indian breed dairy farming requires a combination of financial discipline and biological management. Proper training is the foundation. Every new dairy farmer or gaushala operator should undergo structured online training—especially in financial management—before investing. Working with a consultant for at least twelve weeks before cattle arrive and for the first twelve months afterwards gives the farm a strong foundation for cost control and profitability.
Contact : Somkar Cow Service
Dr. Prashant Yogi, Maharashtra
Website: [https://supportcow.in](https://supportcow.in)
WhatsApp Only: 8624070972
Dr Prashant Yogi unpacks the hidden economics and herd
biology behind India’s indigenous dairy farm
India’s dairy sector continues to rely heavily on milk from indigenous breeds—cows and buffaloes uniquely suited to the country’s diverse agro-climatic conditions. After twentyfive years in dairy farming, including eight years studying HF and Jersey breeds and more than a decade working extensively with Indian breeds, the author brings together practical observations and financial insights to explain the true Production Cost of Indian Breed Milk (PCIBM). This article draws on farm-level experiences, monthly audits, and biological data that matter for both commercial dairy farmers and gaushalas.
Indigenous Breeds: The Backbone of Indian Milk Production
India produced 239.30 million tonnes of milk in 2023–24. Nearly 59% of this comes from indigenous and non-descript animals. Indigenous cows contribute about 11.36% of total production, while indigenous and non-descript buffaloes together account for roughly half of the country’s milk supply. These numbers highlight the central role of native breeds in sustaining India’s dairy economy.
Milk production from indigenous breeds grew by an impressive 44.76% in 2023–24. Their rising importance stems from resilience, low disease susceptibility, adaptation to local environments, and long productive life. While cross-breds offer higher per-animal yield,
Indian breeds provide sustainability and valuable byproducts that reduce overall production cost.
The PC–PM–SC Logic Behind Dairy Operations
Every organised industry operates on a simple financial sequence: **Production Cost (PC)** leads to **Profit Margin (PM)**, which finally determines the **Selling Cost (SC)**. Dairy farms and gaushalas are no exception. Since selling prices differ from region to region and farm to farm, understanding how production cost is constructed becomes essential for achieving profitability. A structured financial review at the end of each month helps identify where money is spent and where deviations occur.
What Determines Production Cost?
Fodder and Feed
Fodder expenses fluctuate with season, rainfall, water
availability, nutrient quality, energy content, and local supply. Green fodder costs typically rise during festive periods and dry months. Dry fodder follows similar patterns, influenced by harvesting cycles and transport availability.
Cattle feed and oil cakes form a major portion of the input cost. Prices vary with protein and fat levels, quality, and credit terms. Small changes in feed composition can significantly alter per-litre production cost.
Mineral Mixture
Mineral mixtures differ widely in purity and composition. High-quality mixtures may cost more but reduce longterm health issues and improve yield consistency.
Labour and Salaries
Labour includes the owner or family members, manager,supervisors, and both skilled and unskilled workers.Their efficiency has a direct impact on productivity. In large herds, labour mismanagement can raise production cost sharply.
Water and Medicines
Water must be available in sufficient quantity and with appropriate quality. Poor-quality water can quickly reduce yield and increase veterinary problems. Indigenous breeds usually require fewer medicines, but preventive healthcare remains essential to keep veterinary expenses under control.
Distribution Costs
Distribution is often an overlooked factor. Transport, packaging, delivery routes, and logistics coordination can quietly raise operational expenses if not monitored carefully. Beyond Milk: Additional Income Streams Indian breed dairy farms have strong potential to diversify revenue. Cow dung and urine can generate substantial income — sometimes between Rs.10,000 and Rs.20,000 per cow per year—through value-added products. Many dung-based and urine-based items, including phenyl, have strong FMCG potential. Ghee, buttermilk, and similar value-added milk products often fetch better margins than raw milk. Agro-tourism and farm training programmes add another layer of income while promoting awareness of Indian breeds. Month-End Financial Audit: A Discipline That Saves Money A monthly financial audit gives farmers a transparent picture of real expenditure. It typically includes costs related to fodder, feed, mineral mixtures, salaries, distribution, electricity, water, vaccinations, deworming, and consultant fees. Loan repayments are then added to determine the total expense. Income from milk, milk products, dung products, urine products, and training programmes is recorded.
separately. The difference between income and expenditure determines profit or loss. Regular financial audits help pinpoint wastage, control cost, and maintain financial stability.
Biological Audit: The Hidden Determinant of Cost
Financial data alone cannot explain a farm’s performance. Biologicalefficiency plays a major role in determining production cost per litre.
A Biological Audit (BA) examines the proportion of milking versus non-milking cows, pregnancy ratios, the number of bulls and bullocks, the age profile of heifers, daily milk yield, and annual health issues. A farm with too many non-productive animals will naturally have a higher per-litre cost. Regular BA reviews allow farmers to correct herd imbalances and improve reproductive management.
Case Study: A Gir Cow Farm in Bhilwara, Rajasthan
A 200-cow Gir farm in Bhilwara conducted a detailed PCIBM analysis in March 2025. The per-litre cost was calculated at Rs.77, comprising Rs.42 for feeding, Rs.13 for labour, Rs.6 each for maintenance and medicines, Rs.2 for packing, Rs.6 for distribution, and Rs.2 for miscellaneous expenses. The case illustrates that with disciplined cost monitoring, Indian breed farms can maintain realistic and competitive production costs. Conclusion: Training and Planning Are Essential Long-term sustainability in Indian breed dairy farming requires a combination of financial discipline and biological management. Proper training is the foundation. Every new dairy farmer or gaushala operator should undergo structured online training—especially in financial management—before investing. Working with a consultant for at least twelve weeks before cattle arrive and for the first twelve months afterwards gives the farm a strong foundation for cost control and profitability.
Contact : Somkar Cow Service
Dr. Prashant Yogi, Maharashtra
Website: [https://supportcow.in](https://supportcow.in)
WhatsApp Only: 8624070972