Premier Quality Kenya Dairy Business Plan — Key Performance Indicators

The yield, feed cost, fertility and milk quality indicators monitored monthly, with the thresholds that trigger intervention.

Key Performance Indicators

Jump to section

The following are the operating measures on which this enterprise should be managed. Three of them — average yield per cow, the share of forage self-grown and feed as a share of milk revenue — carry more information about whether the plan is holding than any revenue figure, because revenue rises with the herd build whether or not the underlying economics are working.

Indicator

Definition

Target

Why it matters

Average yield per cow per day

Litres delivered divided by the average milking herd and days in milk

23 litres by Year 5

A 15% shortfall removes KES 2140442 of Year 5 profit

Share of forage self-grown

Home-grown forage as a share of total forage fed

90%

Below 35% the enterprise makes no money at any scale. The steepest sensitivity in the model

Feed as a share of milk revenue

Milking-herd feed cost divided by milk revenue

Below 60%, 53.2% at Year 5

The industry rule of thumb. On purchased forage the ratio rises above 68% and the business fails

Cost per litre

Milking-herd cost plus depreciation divided by litres sold

Below KES 43 by Year 5

Against a net realised price of KES 48 and a KDB range of KES 30 to 37

Calving interval

Average days between successive calvings

405 days, 13.5 months

The 12-month textbook figure is rarely achieved. Every extra month is lost milk and a delayed calf

Somatic cell count and milk quality

Cooperative test results at intake

Within the quality premium band

Cooperatives are moving to quality-based pricing. Cooling and hygiene are a revenue decision, not a compliance cost

Debt service cover

EBITDA divided by interest and capital

Above 1.30x from Year 4

1.16x in Year 3 even within the grace period. The three-year grace is a condition, not a preference

Silage bunker cover entering the dry season

Months of conserved forage available

At least four months

A zero-grazing unit without conserved forage is exposed every dry season

Heifer sales achieved against plan

Surplus in-calf heifers sold

Approximately 20% of Year 5 revenue

If the market softens, retain and grow the milking herd instead

Calf mortality

Calves lost divided by calves born

Below 6%

Achievable with disciplined colostrum management and housing hygiene