With the removal of milk quotas only a few months away, many Irish dairy farmers are set to calve and milk a lot more cows in 2015 than in previous years.
However, given that milk prices are free-falling of late and with ongoing market uncertainty, perhaps, in some cases, the number of extra cows that we hope to milk next year ought to be reviewed? 2015 is not a reference year.
Quotas will also be absent in 2016 and beyond. The focus in low milk price years must be on extremely tight cost control, accepting whatever lowly priced output that results. I read with interest a suggestion by Dr David Dobbin that Northern Ireland farmers should ease back on milk output levels.
Given the current market uncertainty, will we hear a similar call from South of the border? The message in the North is ‘less milk’, here in the South it remains ‘more milk’, yet North and South are trying to sell product into the same depressed market.
Perhaps nobody in the industry down south industry is brave enough to prioritise the interests of the producer over the policy-makers lust for a 50% increase in milk production by 2020? A 50% increase remains a valid and worthwhile target, but in that regard, our destination has to be more important than our speed.
Should rapid expansion plans be put on hold on some farms until markets recover? I fear for the negative consequences for some, of trying to adjust to the demands of larger herds and increased loan repayments without the cushion of a decent milk price.
It’s easy to measure the financial fall-out. The effect on the mental and physical health of farm families under stress can be more difficult to quantify. Years such as 2015 are all about saving the business and leaving any stresses that arise outside the house where they belong.
I hear many younger farmers in particular, outlining that they will milk a lot more cows in 2015 to ‘dilute their costs’.
However, I am also aware of many farmers who are planning to milk 10-15% less cows next year, while also rearing 10-15% less youngstock, with a view to not incurring the costs in the first place. They have already sold a lot of stock to raise cash to bolster next year’s budget.
With poorer cows removed and less heifers coming into the herd, most expect to deliver close to the same milk output as 2014 but with reduced expenditure on feed, fertiliser and silage related costs in particular. These farmers are focussed on their own goals and profits, not those of their processors, advisors or Government policy makers.
When a storm is brewing, experienced seamen go back to port.
There is a strong market for Irish dairy cattle in the UK. Perhaps there are situations where the most profitable thing many can do with a percentage of their soon to be enlarged herd is to sell them now rather than calve and milk them?
Cash is king – the cliché was never more apt. More cows or less? We should encourage more debate about this issue as dairy farmers complete their financial and feed budgets for 2015.