Grass availability drives profit margins on spring-calving dairy farms
The average grass-rich dairy farm in 2014 generated a net profit of €1,836/ha compared to €1,714/ha on the grass-poor dairy farms according to the Teagasc e-profit monitor figures for the year in question.
Grass-rich dairy farms are defined as those businesses utilising in excess of 8.1t of grass dry matter per hectare per annum.
Grass-rich farms generated an average gross output of €4,126/ha, compared to an average of €4,708 on grass poor units. This represents a 14% lower level of gross output. The lower output on the grass rich farms reflected lower output per cow and per hectare.
Output per ha on the grass rich farms was, on average, 107kg milk solids/ha or 13% lower than on the grass poor farms. This is as a result of a lower average stocking rate (-0.06 LU per ha) and lower output per cow (-38kg milk solids per cow).
On average, the grass rich farms had lower variable costs than the average of the grass poor farms at €1,213/ha versus €1,765/ha.
However, as a percentage of gross output they accounted for only 29% compared to 37% of total variable costs on average on the grass poor farms.
The gross margin was an average of €2,913/ha on the grass-rich farms which was 1% lower on average than on the grass-poor farms.
The biggest variable cost on both grass rich and grass poor farms was purchased forage and concentrate accounting for 25% and 45% of total variable costs respectively. On average the grass rich farms had lower fixed costs than the average of the grass poor farms at €1,077/ha versus €1,229/ha.