Costs on dairy farms have increased by 12c/L on average over the past four years, according to Dr. Laurence Shalloo from Teagasc.
The head of the Animal and Grassland Research and Innovation Programme at Teagasc Moorepark was speaking at a seminar held as part of the national milk quality farm walk in Co. Limerick yesterday (Thursday, September 12).
The event was hosted by the Macnamara family who were the overall winners of the 2023 National Dairy Council (NDC) & Kerrygold Quality Milk Awards.
Dairy
Dr. Shalloo told the seminar that the high cost of production in difficult years such as 2024 “challenge the resilience of the system”.
“In the last four years costs have increased by 12c/L. We all know why, Ukraine, feed costs, fertiliser costs and some of the investment that went in after 2022,” he said.
“We just have to sit back now and start thinking about the system and can we get those costs back to 30c/L on average across the board?
“We’re never going to get it back to the 24c/L that it was in 2020 because things have changed, services have changed, labour has changed, but can we get it back to that 30c/L? And how do we do that?” he added.
Shalloo said that 26% of the 12c/L increase in costs at farm level over the past four years can be attributed to feed costs.
“Feed usage didn’t really change, it was all about the price change and we have to try and pull that back further,” he said.
“17% of the costs increase came from fertiliser costs and fertiliser usage actually dropped, so again we need to get those input prices back down,” he added.
Dr. Shalloo acknowledged the importance of a higher milk price and that some costs such as servicing milking parlours and veterinary costs are “very hard to take out”.
Dr. Shalloo also told the seminar that the agriculture sector has “a big target” to reduce emissions by 25%.
However, he said that it was positive that emissions from the sector reduced by 4.6% last year, which is about 20% of the required emissions reduction.
He noted that emissions reducing technologies are currently available to farmers, adding that reducing the age of slaughter “is a big part” of achieving the overall 5.75 Mt carbon dioxide equivalent (CO2eq) reduction.
Shalloo said that research is at an early stage on feed additives that are reducing methane by 25-30% in a grazing setting.
“There’s a journey to go but if you asked me the question three or four years ago, I would have had a completely different answer. I think there’s a lot more excitement around what can be done,” he said.
Shalloo told the seminar that an important consideration is if such a new product makes it to market, who is going to pay for it.
“That conversation needs to start now so that we can figure all of that out when we have all of the technologies we have to deliver,” he said.