A review carried out by Teagasc of over 700 dairy farms has found a difference in range of €570/cow in terms of on-farm costs.
Patrick Gowing, dairy specialist at Teagasc, was among the team that examined the eProfit monitors and ranked them on their profitability.
He said that the range in profitability per cow was €1,140 from the top 10% to the bottom 10%.
“On a 100-cow herd, this would equate to a €114,000 difference in total profitability,” he said.
Dairy
Gowing explained that the difference in profitability between the two groups was explained by gross output and cost control.
The analysis found the top 10% of farms had higher output, with similar stocking rate and concentrate feeding.
These farms achieved a higher milk price due to better milk solids, which Gowing said reflected “the benefit of better genetics in the herd”.
He added that this equated to over €200/cow against the bottom 10%.
The review shows that increased milk production on these farms was due to cows eating more grass dry matter (DM) than the bottom 10%.
Along with growing more grass, Gowing said that making sure paddock size is suitable for the herd is crucial.
He advised that “targeting 1,300-1,400kg DM/ha pre-grazing yields as often as possible will increase your grass utilised per cow”.
Costs
Gowing noted that the review showed that a “massive” difference in costs across farms.
“It is not where the average is but where you are compared to the average that is important,” he said.
The data showed a difference of around €570/cow between the costs of the bottom 10% and top 10% of farms.
There has been a year-on-year increase in costs since 2015, but this spiked in 2022 and has remained high since.
Gowing said that meal feeding and fertiliser continue to account for a large portion of total production costs.
However, he said these elements do not fully explain the majority of the difference seen in costs.
He cited to veterinary costs as an example, which have an average cost of €89/cow on the eProfit monitor.
However, the review found that the range is from €50/cow to over €140/cow, or a €9,000 difference per 100 cows.
“All farmers need to benchmark their costs to see where they are. In any year, there can be a genuine reason why a cost may fall out of line.
“But if it is continuously over the average, this needs to be looked at and addressed,” Gowing said.