‘Crazy’ N Directive concern
But even for one of the group's most successful suppliers, there are new concerns on the horizon principally the Nitrates Directive.
"It's crazy," said multi-award winning farmer Michael Downing, when his farm at Whitechurch, Cork was visited during Dairygold's recent briefing for the Guild of Agricultural Journalists.
'Farming by the calendar' is how he describes the future, if the 13-year-old EU directive is applied as proposed.
Like many farmers, he is frustrated by the contradiction between the CAP Mid Term Review pressure to produce milk more efficiently, and the Nitrates Directive which looks like forcing him to remove one third of the cows from his farm, which is described by Teagasc as having all the essential ingredients in place for successful grassland management and production.
The dairy industry estimates of a €6,000 cost for even a medium sized dairy farm to cope with the proposed Nitrates Directive limit of 170kg of nitrogen per hectare per year from livestock manure are a big concern to Mr Downing.
The extra cost arises mostly from a 24% acreage increase to keep the same number of livestock, and stay within the nitrogen limit.
Carrying 191 livestock units on 240 acres, the Downing farm would have huge costs to comply with a 170kg limit including extra water storage for 300,000 gallons (unless County Councils allow reed bed treatment).
Michael Downing and other producers say the Directive will bring "farming by the calendar", because it bans slurry spreading until January 16.
Despite high output, low costs and top quality milk which place him among the upper echelon of producers, Michael Downing says a commonsense application of the Nitrates Directive, along with better availability of milk quota and strong milk prices, will be needed for the expansion to secure a dairy farming future.
Huge changes due to the Nitrates Directive are envisaged by Billy Kelleher of Teagasc, who plays a vital role in Dairygold Co-op as the co-ordinator of the Teagasc/Dairygold Monitor Farm Programme.
Performance is recorded on 27 of the Co-op's top suppliers' farms, and this information and farm visits are used to transfer vital milk production knowledge to the co-op's 3,520 suppliers of 190 million gallons of milk per year.
Billy Kelleher says the primary production base for the dairy industry could move away from its current locations towards counties like Tipperary, where low stocking rates and low nitrogen usage allow the best chance of operating a New Zealand type of dairy farming, forced on Ireland by the Nitrates Directive and the other economic pressures on dairy farms. He warned that the Nitrates Directive will result in fewer dairy cows, with higher yields, but also higher production costs and lower profit margins.
Dairygold Chief Executive Jerry Henchy said the stocking rates imposed by the proposed 170 kgs nitrates limit will force most Dairygold suppliers to cut stocking rates by 15% to 20% with a consequent increase in milk production costs and a cap on future expansion potential. "We believe this would be disastrous for the future of dairying in the region," he said.
