Dairy farming in Ireland post quota…what will you be doing?

dairy cowThe future of dairy farming in Ireland was detailed recently in the Review of the Financial Status of Irish Farms and Future Investment Requirements by Teagasc and Bank of Ireland. Here are some of the stats and figures it has about the projected future of the dairy industry in Ireland.

The target of a 50% increase in milk output by 2020 (from the 2007-2009 base) is highly likely to be achieved. The 2013/2014 quota year saw an increase of 9% in volumes from the 2007-2009 base and approximately 30% of the 50% projected increase has occurred already.

Over €70m was invested by dairy farmers in milk quota since 2007. Since 2007, the average deliveries per farm increased from approximately 250,000L to 330,000L in 2013, or a 32% increase. Since 2007, the number of dairy farmers has decreased from 21,000 to 18,000.

 Based on productivity gains per cow of 18%, Teagasc estimates that 1.499m cows will be needed to achieve the 50% expansion target, which would see an additional 450,000 cows from the 2007-2009 numbers.

The report also shows that two thirds of dairy farmers, or 11,000 plan on expanding their production levels in 2015. Some 5% are planning on exiting dairy farming or decreasing milk production.

 The average current herd size of those planning to increase production is 79 cows, while those planning no change in production have an average herd size of 51 cows.

Almost three quarters of the 11,000 farmers planning to expand production between 2015-2017, plan to expand by less than 20%, relative to their existing level of production.

 Only 3% of dairy farmers plan to expand production by 50% during 2015-2017.

New entrants to dairy farming the report estimates, plan on having herd sizes of, on average, 130 cows.

 Over the next two years, 2015-2017, almost 4,000 dairy farmers are planning on investing in their milking facilities and a further 6,000 are planning on investing in animal housing.

The Teagasc National Farm Survey in 2014 found that almost one third of dairy farmers do not plan to use any bank finance for their farming investment, using only farm cash flow to fund investment. A further 19% intend to use only bank finance, while the remaining 51% intend to use a combination of the two.

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