Research from Teagasc has found that reducing cow numbers would be the "most expensive option" for dairy farmers to remain compliant with changes to the nitrates derogation.

The research was published as part of a set of papers presented to Minister for Agriculture, Food and the Marine Martin Heydon this week on the Nitrates Action Programme (NAP).

One of these papers is titled 'Environmental and economic modelling of the impact of adjustments in the maximum stocking rates permitted under Ireland’s Nitrates Derogation'.

This document found that around 49% of dairy farms in Ireland and 65% of national milk production was produced on farms that had an organic nitrogen (N) stocking rate of greater than 170kgN/ha.

If these 7,609 farms were required to reduced N stocking rates down to 170kg/ha, this would require an average reduction of 27 cows/herd and result in a reduction (on average) of €43,555 (39%) in family farm income on those farms, if this was achieved by reducing cow numbers only.

This would result nationally in a reduction of 203,719 cows (14%) and a reduction in national milk production of 1.2 billion litres (15%).

The report also evaluated the impact on farm income of other compliance strategies such as: renting additional land; exporting slurry from dairy farms; and contract rearing dairy heifer replacements plus non-replacement livestock.

These strategies led to reductions in family farm income of €10,928 (15%); €18,841 (19%); and €11,136 (14%) respectively on the farms affected.

Renting additional land or exporting slurry would have similar costs, slurry export being slightly more expensive, but the logistics and management of these two scenarios would be considerable.

Contract rearing dairy heifer replacement and removing non-dairy animals from the farm may prove the most cost-effective scenario, depending on the availability and willingness of other farmers to carry out this task and the capacity of farms that remove non-dairy animals and contract rear heifer replacements to carry additional dairy cows.

Looking at more detail at the herd reduction scenario, the paper also examines a scenario in which an upper derogation limit for all dairy farms over 170kgN/ha was set at 220kgN/ha.

In this case, 2,258 would need to reduce their dairy cow herds, with average reduction required of 15 cows per farm.

In a 220kgN/ha scenario, the 2,258 impacted farmers would lose an average of €25,328 per year (19% income reduction).

According to Teagasc, the cow reduction scenario has a handful of advantages over the other options, including simplicity of implementation and the lack of dependence on other farms; the direct reduction in nitrogen output; and the lack of requirement for additional land or external arrangements.

However, the cow reduction option has several disadvantages, according to Teagasc.

These include:

Significant loss of income due to reduced milk production;
Loss of milk production has implications for the wider dairy industry and related supply chains (for example, less beef production due to less dairy calves to beef);
Fixed costs per remaining cows increase, significantly reducing overall farm profitability;
Negative impact on farm size and production capacity;
Reducing cow numbers will reduce grass utilisation;
Viability of some dairy farms will be undermined and ultimately, it would be expected that some would cease milk production.

The Teagasc report outlined that any measure taken by dairy farmers to stay compliant with any future stocking rates under the NAP would be in addition to other options, including renting land, exporting slurry, and removing non-dairy cattle.

Given the economic cost of reducing cow numbers, the report notes that it is likely that farmers would only reduce cow numbers after each other option to reduce stocking rates has been exhausted.

Four other reports were submitted to the minister by Teagasc this week.

The report on 'Slurry and dairy soiled water volume estimates' found that on dairy farms the volume of slurry and soiled water produced is underestimated presently compared to the current regulations which require 0.33m³/cow/week for slurry storage and 0.21m³/cow/week for soiled water storage, plus an allowance for rainfall runoff from any adjacent uncovered area.

This outcome reflects higher milk yields and more slurry output, requiring more capacity than previously mandated by outdated benchmarks.

The report on 'Improving slurry nutrient distribution on dairy farm holdings' outlines that significant opportunities exist to improve nutrient use efficiency through better slurry management.

Since a proportion of organic N is captured when cows are housed, redistributing this slurry away from milking platforms and onto support lands can help balance nutrient loads depending on stocking rates.

This in turn can allow farmers to reduced reliance on chemical fertiliser.

The report on 'An environmental and economic assessment on the impact of possible reductions in the maximum chemical nitrogen allowance for all grassland stocking rates' indicates that pasture based farms have reached a critical point in terms of chemical N fertiliser rates.

Further reductions in the maximum allowable chemical N applications on grassland risk exacerbating feed deficits on farms, pushing dairy production systems into deeper reliance on external feed sources, this report said.

Finally, the report on 'An environmental and economic assessment on the impact of possible reductions in the maximum chemical nitrogen allowances for main arable crops' outlined that the current fertiliser levels used on arable crops are based on an economic optimum, above which further yield increases do not cover the cost of the additional fertilizer.

This report also said that reducing recommended N rates for arable crops is unlikely to provide any environmental benefit but risks reduced yield.

Commenting on these five reports as a whole, Teagasc said that the risk of not being able to renew the nitrates derogation will "significantly undermine the profitability the viability of pasture-based ruminant livestock system".