85% of dairy farms are viable economically

85% of dairy farms are viable economically
James Healy President of Macra, Prof. Gerry Boyle, Director Teagasc, with Minister for Agriculture, Food and the Marine, Michael Creed TD, and Fiona Muldoon, Chief Executive of FBD Insurance, present Paul Bowden, Urlingford, Co Kilkenny, as the Teagasc/FBD Insurance Student of the Year for 2018. Photo: John Ohle Photography.

Using data compiled in the 2017 Teagasc National Farm Survey, a newly published sustainability report by Teagasc tracks the performance of Irish farms in terms of economic, environmental, and social sustainability.

It shows 85% of dairy farms were economically viable.

This ranged from 99% of the top one-third most profitable dairy farms to 64% of the bottom third.

On average, dairy farms derived 90% of gross output directly from the market.

The average dairy farm emitted 502.5 tonnes of agricultural greenhouse gases (GHG) in 2017. This is based on the Intergovernmental Panel on Climate Change (IPCC) definition of agricultural emissions, and is not a full life-cycle assessment that would include embedded emissions in agricultural inputs, such as purchased feed.

Most dairy emissions, 62%, were from milk-based output, with 37.5% allocated to beef production on dairy farms (such as cull cows and calf sales or transfers, mainly).

The remaining emissions, less than 1%, were associated with sheep and crop production on dairy farms.

The average farm emitted 0.733kg of CO2 equivalent per kg of milk produced (0.723kg per kg of fat and protein- corrected milk, FPCM).

It was found that farms with the best economic performance also have the lowest emissions intensity per kg of milk produced.

A life-cycle analysis approach (including both agricultural- and energy-based emissions) results in a farm average carbon footprint of milk at 1.14kg per kg of FPCM. According to Teagasc, this is consistent with results produced by Bord Bia from farm data collected via the Bord Bia Origin Green programme.

Analysis of the 2017 Teagasc National Farm Survey showed the average dairy farm emitted about 2.82 tonnes of ammonia emissions (0.0059 kg per kg of FPCM).

The majority, 77%, was from milk-based output, with 10% allocated to beef output, and 13% to chemical nitrogen fertiliser application.

Again, the top economic performing dairy farmers produced milk at a lower ammonia emissions intensity, compared to the middle and bottom cohorts.

However, when it came to nitrogen balance (excess of inputs over outputs), higher surpluses per hectare were found to be related with higher farm economic performance. This occurs despite slightly higher N use efficiency on such farms, and is due to the greater production intensity on economically-better-performing farms.

The nitrogen balance across all dairy farms was found to average at a 171.9kg surplus per hectare (equivalent to 70.9kg of FPCM per kg of surplus nitrogen). The figure was higher for top- and middle-performing farms.

Phosphorus balance (excess of inputs over outputs) averaged 11.4kg of P surplus per hectare across all dairy farms.

Analysis of social sustainability indicators indicated only a minority of dairy farm households, 8%, fell into the vulnerable category of being non-viable and without off-farm employment, but 18% of the bottom third, rated for gross profit margin, were classified “at risk”.

85% of dairy farms are viable economically

Overall, 76% of dairy farmers were found to have received formal agricultural education of some description, with agricultural training rates only slightly higher across the middle- and top-performing cohorts.

Only 8% of dairy farmers were found to be at risk of isolation due to living alone.

This risk was lowest for the top-performing cohort, who were also found to be the youngest.

The sustainability survey indicated that dairy farmers worked 2,341 hours per year on their farms (approximately 45 hours per week), on average. Hours worked were highest for farms in the middle third for economic performance, but this figure does not take into consideration off-farm employment, or the share of hours worked by other staff or family members.

Innovation indicators were also analysed.

Over 63% of the dairy farmers in the top group were milk recording, compared to 18% in the bottom group.

Better economic performance was also more prevalent among discussion group members, who made up 56% of the top group, compared to only 27% of the cohort of worst performers.

Spreading most of their slurry in the early spring was slightly higher across the top- and middle-performing cohorts, and liming was more prevalent among the higher economic performers (40% of the top performers compared to 25% of the bottom group in performance rankings).

Twice as many farmers in the top group (39%) engaged in reseeding of grassland, compared to the bottom group (19%).

The 2017 sustainability report by Teagasc included farm system comparisons.

In general, it was found dairy farms showed the strongest economic performance, significantly ahead of all other systems in terms of economic return and profitability per hectare. Tillage was in turn ahead of both cattle and sheep (which were similar), but was lower than dairying in terms of income-per-labour unit. Sheep farms, and cattle farms to a lesser extent, returned significantly lower income per labour unit than dairy or tillage in 2017.

Cattle and sheep farms were found to be most at risk financially, with only around 25% in both systems classed as economically viable.

Dairy farms were the most economically viable, followed by tillage systems.

Environmental sustainability is harder to compare directly across different farm systems.

Per hectare, dairy farms show the largest emissions, significantly greater than any other system, due to the greater production intensity on these farms.

However, in terms of kg of GHG emitted per Euro of output generated, cattle and sheep farms had much higher emission levels, due to their lower value and volume of output compared to dairying systems

Livestock farms have higher GHG emissions per hectare than tillage, which is expected due to the greater emissions associated with animals.

Ammonia emissions per hectare were significantly higher on dairy farms than all others in 2017. Cattle farms were the next highest, at half that of dairy farms, followed by sheep and tillage farms. Per Euro of output, cattle farms emitted most ammonia, followed jointly by dairy and sheep farms, with ammonia emissions per Euro of output lowest on tillage farms.

Dairy farms had the largest nitrogen surplus per hectare, but are similar to the other livestock systems in terms of nitrogen-use efficiency.

Dairy farms had farm-gate P balances significantly higher than cattle, sheep, and tillage systems, but this should be interpreted with caution, as soil test data was not available for the analysis.

P use efficiency was highest on tillage farms.

The Teagasc researchers said the National Farm Survey sustainability indicator is a powerful tool with which to assess actual performance and compare farm systems.

An updated life-cycle analysis for beef production is being developed by Teagasc, and the Teagasc NFS data collection schedule will be expanded to enable this development.

It is also planned to measure biodiversity; funding has been obtained to investigate the potential of remote mapping and ground-truthing methods of farmland habitat biodiversity measurement for a representative portion of National Farm Survey farms.

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