Teagasc urges dairy farms not to wait for global economic recovery

DAIRY farm businesses cannot afford to wait for global economic recovery to resume their business growth according to Teagasc Pat Dillon, head of the Teagasc Animal Production and Grassland Research Centre, was writing in the current issue of Moorepark News.

He said Ireland’s proud tradition in dairying is built on the resourcefulness of single-minded dairy farmers who changed their farming methods and made technology work for them.

Dr Dillon noted that the medium-term outlook for milk price is positive with most analysts predicting a recovery arising increased world demand.

But he warned this will only occur as world economies exit recession and suggested that dairy farm businesses should move now to control their futures by developing systems insulated from market volatility and external cost exposures.

“This year and beyond, dairy farming must be based on a pragmatic overall business plan which highlights necessary cost outlays and realistic revenue streams while identifying areas of the farming business that are under-performing.

“The historical success of dairy farms in Ireland from converting high quality grass cheaply into milk has been eroded in recent years with average production costs of 24.5c/l on dairy farms in 2009.

“It makes sense to take immediate steps to reduce costs by substituting out high-cost inputs for lower cost alternatives (replacing concentrate and silage with grazed grass) or reducing the cost of inputs (buying less inputs and at lower cost),” he said.

Dr Dillon said in the longer term, increases in farm efficiency will reduce milk production costs further, based on herd EBI genetics, higher quality pastures as a result of good grassland management, adopting high quality milk and animal health protocols, and lower-cost farm infrastructure.

Fertility performance is substantially below optimum and farmers who focus on achieving a high EBI herd (high fertility) can very effectively realise increased productivity from higher calving rates and a more mature herd profile.

Dr Dillon said Teagasc’s new dairy farm efficiency programme is one way of assisting farmers to achieve these objectives.

“Dairying will continue to reward Irish dairy farmers with one of the best incomes in agriculture while there will be opportunities to expand milk production in the very near future.

“As we approach the end of the milk quota era, the challenge to our industry is grave. Modern business planning principles and the adoption of research management technology will deliver profitable returns on our dairy farms in the future,” he said.