Are Irish dairy farms big enough to support additional labour?
The Irish dairy industry has undergone considerable expansion since the shackles of quotas were removed in April 2015.
In the intervening period, the Irish dairy herd has grown and it now consists of approximately 1.3 million cows.
About 170,000 more dairy cows can now be found on Irish farms than the quota-era of 2014, and these additional numbers are part of the reason why there’s a labour shortage on Irish dairy farms.
Excluding retirees from the sector, the Irish dairy industry will need to bring in about 3,000 people over the next decade. When retirees are included, this figure stands at about 6,000.
And this poses the question: ‘Are Irish dairy farms big enough to support additional labour?’.
Speaking at Thursday’s ‘Managing Labour on your Dairy Farm’ conference, Teagasc’s Prof. Gerry Boyle said: “Over 50% of all Irish dairy farms now have more than 100 cows.”
The Teagasc director said farmers who have expanded in an efficient manner and are fully aware of their costs may be the only ones who can justify employing additional staff.
“When you total up all of the costs of taking on an additional worker, you could be talking about a minimum salary of €30,000 and that’s a lot of money to take out of a dairy farm.
“That has to be carefully assessed,” he stressed.
Boyle added that Teagasc has always advised farmers to look at the efficiency of their own businesses before they expand. This is important as it is expansion that drives the labour demand at farm-level.
“That’s an assessment that needs to be done with a farmer and his/her advisor and sometimes they find, when they do the assessment, that they are not really in a position to make the expansion pay and they might be far better off scaling down.
People don’t like to hear that because the natural motivation is to drive on.
“At the end of the day it’s all about profit. You will find a lot of variation in any group of farmers in terms of efficiency. 80 cows can leave as much profit as 120 cows in some cases,” he said.
It’s possible for a well-run operation to handle 100 cows, he said, which is close to the optimum for a one-person system.
Obviously, if you go over the 150-cow mark you are going to need extra labour. To make expansion pay, you have to increase cow numbers by a certain minimum amount.
“You couldn’t justify employing another labour unit by going from 100 to 120 cows and that’s the problem. You have to increase to a certain scale to justify employing a full-time person.
“Obviously employing part-time labour is a solution, but it’s very difficult to find workers to work part-time,” he concluded.