Teagasc urges reviews ahead of EU reforms
Laurence Shalloo of the Teagasc Research Centre at Moorepark, Fermoy, said dairy farmers who apply the best business principles to labour, investment and financial management have a secure future in farming.
Addressing more than 700 dairy farmers at the first of two Teagasc dairy conferences, he said low cost animal housing systems will play a crucial role in the development of a competitive industry.
“Farmers who remain in milk will need to expand milk output by up to 50%. Such expansion will require extra animal housing on many farms. The capital cost of conventional housing systems is up to €160,000 for a 100-cow herd.”
Mr Shalloo referred to Teagasc analysis which projected a decline in the number of dairy farmers from 25,500 at present to 18,000 by 2010.
He said the cost of the additional milk quota for those who stay in production will also need to drop significantly from current prices of 31/c litre (€1.41/gal).
He added the price for milk quota must drop in 2005 and each subsequent year if most farmers who remain in milk production are to have a viable future.
Dairy programme manager Matt Ryan said the reforms coming into effect, which involve de-coupled payments and reduced price supports, will cover the period until 2013. The projected drop in milk prices will be cushioned by direct payments.
“However, the long- term viability of the industry will be dependent on dairy farms with sufficient scale and productivity and by an innovative and aggressive processing and marketing sector,” he said.
Dr James Humphreys, of the Teagasc Research Centre, said dairy farmers could increase profit by up to €5,000 per year by making better use of clover in grassland.
He added that greater use of white clover had the potential to reduce chemical fertiliser use, cut costs and boost income.
