Dairy farmers must improve cost efficiency
That includes increasing Ireland’s average milk per cow of about 900 gallons to more than 1,100 gallons.
This was one of a number of targets set for farmers at the Teagasc National Dairy Conference in Killarney, if they are to survive changes in EU and world trade policies.
Economist Trevor Donnellan explained that having too many cows is a source of inefficiency for many farmers. And many dairy farms lose out on 15,000 per year of income, because it costs them almost 30p per gallon more to produce milk than the most efficient farms, said Teagasc dairy specialist Tom O’Dwyer.
The number of dairy farmers has dropped from 63,000 in 1983 to 26,000 today, a drop of over 4% per year. This decline is set to continue. In 2001, almost 1,200 farmers ceased milk production.
The average dairy herd is now 47 cows, producing 42,000 gallons per year.
“A typical dairy farmer with output of 50,000 gallons is making an income of around 42,000. This farmer would need to increase output by 15% (6,600 gallons) by 2008, in order to secure an additional 12,000 in income. This is the equivalent of an annual income rise of 4%,” said Mr O’Dwyer.
This year, because of lower milk prices, only 36% of dairy output will be retained as profit. The target set by Teagasc is up to 60%.
