Farming skills stagnation hitting industry development
The Dripsey, Co Cork, dairy farmer linked this to low participation in improved methods such as discussion groups and cost per litre analysis. He said farming skills need to improve dramatically.
He warned against premature dairy herd expansion, with a risk of incurring superlevy fines because scrapping of milk quotas is still years away in 2015, and 1% quota increases are likely to be absorbed by rising butterfat content.
He also predicted the Single Farm Payment system will prevent freeing up of land for milk production.
Expansion offers an opportunity to put dairy farming on a better business footing, said Murphy.
He called for a change from farming for a living to farming to make money.
This would require an adequate scale of operation to tide farmers over difficult years, and an exit strategy to allow retiring dairy farmers take a financial return out of the business they had built up.
But processing profit margins were too low, and the industry had to fight its corner against retail multiples for a better share of profits.
According to Mr Murphy, retailers study Teagasc figures on milk production costs, and work out from them how low a price they can offer to co-ops for dairy products.
But the Teagasc figures do not include the cost of the farmer’s labour, and the cost per litre figure will be higher for expanding farmers, he pointed out.
Another forum panellist, Irish Dairy Board and Dairygold Co-op chairman Vincent Buckley, said retailers in price negotiations point out how cheaply the best farmers can produce milk.
