Some dairy farmers will continue to milk cows into the winter this season, to make up for loss of income during the year.
With around one third of our dairy cows calving after late March, this should not prevent an adequate dry period.
However, many other factors should be considered.
If the condition of cows is poor, or if silage quality is poor, the economic return from milking into January is unlikely to be profitable, due to the amount of concentrates that would be required to produce good quality milk.
On the other hand, if cows are in good condition, and silage quality is over 72 DMD, there is profit to be made in continuing to milk late calvers, if they are producing around 14 kitres of good quality milk from a few kg of concentrates.
Many farmers who wisely supplemented cows to maintain milk yields have availed of increased late autumn/winter milk prices, which will compensate for some of the bad prices in 2016.
But farmers in some wetland areas had a very difficult autumn.
Understandably, there is some doom and gloom in dairy farming circles at present due to the disappointing price for milk in 2016.
Some farmers are also concerned with some overhanging superlevy bills, and borrowings.
The deterioration in the world market prices for dairy products lasted longer than expected.
Some farmers blame the ending of quotas for the problem, but that has little to do with important market factors such as the world over-supply of milk, and an easing of Chinese demand.
However, based on Teagasc and international forecasts there is a more positive outlook for dairy products in the medium to long term.
On the bright side, milk prices for 2017 look quite promising.
However, farmers should plan for volatility in milk prices, and should examine all possible options with their bankers to maximise income, and to arrange cash flow in difficult times.
In the longer term, there is generally good confidence in dairying.
Much of this confidence is based on the world’s population growing rapidly, with the demand for food, including dairy products, estimated to increase as much as 40% over the next few decades.
Most of the increase in demand will come from countries that have hundreds of millions of poor people whose wealth is improving, and hopefully it will continue to do so.
As a result, most dairy farmers have plans to increase cow numbers, and some non-dairy farmers are planning to change to dairying.
For all of them, perhaps the drop in milk prices in 2015/2016 has been a good indication of the necessity for serious planning before taking any big steps into dairying.
Sensible planning is the key to success but it does not always happen.
International sources forecast volatile prices of between 24 and 35 cent per litre for the next decade.
But there is also consensus among international forecasters that shortage of food and higher prices will be the global experience in the foreseeable future.
Let’s hope Irish farmers can avail of that situation.
I would like to take this opportunity to wish all my readers a very Happy Christmas, and a prosperous New Year.
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