Dairy farmers urged to prepare their businesses for freer market

DAIRY farmers were urged yesterday to use the next five to six years to prepare their farm businesses for a freer market in the longer term.

Dairy and beef farmers were given examples of how to reduce fertiliser costs during an open day at the Teagasc Solohead Research Farm in Co Tipperary.

Pat Dillon, head of Teagasc Moorepark Dairy Production Centre, said dairy enterprises will need to grow in size, be labour efficient, as well as being low-cost systems of production.

Production technology will continue to play an important part in improving the profitability of dairy farms supplying high-quality milk for the food processing industry.

Noting that the open day, organised by Teagasc and Tipperary Co-op, co-incided with a large reduction in milk price this spring, he said there is an urgent requirement for dairy farmers to reduce the cost of milk production.

Research at the Solohead farm had shown that fertiliser costs can be substantially reduced by replacing chemical fertiliser with white clover and the efficient recycling of slurry.

Milk price in the EU is and will be exposed to substantial fluctuations over the next number of years as supports available from CAP recede, he said.

Laurence Shalloo, Teagasc Moorepark dairy researcher, said milk price volatility will be a key feature of the Irish dairy industry of the future.

He advised producers that there is a requirement to complete a financial appraisal of their dairy farm business

Mr Shalloo urged dairy farmers to complete a financial plan, setting targets based on income requirements today, in five years and in 10 years.

“Average cost producers should target cost reductions with the largest potential in the form of feed and fertiliser — then think about expansion,” he said.

Meanwhile, the Irish Co-operative Organisation Society said last night it was disappointed the European Commission had giving the wrong signal to dairy markets by voting to drop the first skim milk powder intervention tender prices by 3.3%.

Irish Co-operative Organisation Society president Pat McLoughlin, who was in Brussels to lobby for further dairy support measures, said it was important for the commission to give a strong signal of support and to maintain prices as soon as the tender buying process kicked in.