Wexford farmer and former Irish Farmers Association (IFA) livestock chairman, Michael Doran, is making the move to dairy and his expansion plans are well under way.
Suckler specialist Doran is a guest speaker at tomorrow’s AgriFood Conference where his business and dairy expansion conversion will feature as an example of the growing dairy driving across Ireland.
Speaking to AgriLand, Doran said now was the first real opportunity for his dairy ambitions as he leaves the suckler business behind him.
“I left agriculture college in 1994 and I tried to get milk quota from my local co-op but they never followed up. I felt young people at the time were excluded from the dairy sector, in that it was impossible to get in unless you have money to buy quota. But there is a great opportunities now with the abolition of milk quotas in 2015 and we are making a go of it.”
Doran explained cash pressures on his suckler herd business over the past number of years was a key driver for his move to dairy.
“I decided to go for it. The single farm payment is set to be reduced further with the new Common Agricultural Policy, the suckler cow welfare scheme was going, there was also the loss of REPS. We were set to lose more again. That was the drive behind the move to dairy, that is why I am looking to secure a decent family farm income. It’s a 25-year investment.”
And he said his business plan is key. “I’ve looked at the figures, I’ve made the business plan. I’m very confident. Even with volatility in the market I plan to operate a low-cost system and do very well. The one key message I would like to get across is the importance of a business plan, in terms of costs and projections. If it is not done correctly the business will fail.”
As a successful new dairy entrant scheme he was allocated a milk quota of 200,000 litres in recent months.
Doran explained he farms 120Ha, 50ha is leased, 52Ha as a grazing block and 13 livestock units. “I sold my 60 suckler cows and bought 80 high EBI Jersey cross heifers. I basically swapped one for the other,” he said.
“Another factor for the move is that this opportunity may never happen again. I am 38 years old, the chances of me doing this in 10 years time is slim. With the abolition of quotas, this is the first opportunity to do it so now in the opportune time.”
In terms of investment, he said his local bank has been very helpful. “The first two, three years converting will be tough enough going in terms of cash-flow. i have borrowed €120k for a milking parlour, I have a bridging loan of €50k. I sold my suckers to buy dairy, basically swapping one for the another. My capital costs are low. My business plan is tight so I’m confident.”
Doran’s aim is to expand to a milk 160 cows in three years.
“I want to increase cow numbers as quick as possible. Then I want to see how I will be able to carry more cows on that platform. In year five I hope to be in the top 25 per cent of dairy farmers. According to my profit monitor, I’ll be in the top 10 per cent of dairy farmers.”
He said the Teagasc profit monitor is also fundamental for his business.
“If you are not able to measure you costs, you will not be able to cope with volatility and your business will be more exposed to the world markets with its highs and lows. I’m in a position to weather the storm. This is my 25-year investment.”
Good genetics and fertility is also essential, he said, noting his preference for Jersey heifers. “I spent a lot of time breeding ideal suckler cows that milk and have good fertility. The work of the Irish Cattle Breeding Federation and HerdPlus is key. I was looking for a system that could handle bigger numbers and the Jersey crop animal suited my system better than Holstein Friesian in my opinion. It’s a hardy animal, it’s milk solids are good and the genetic breeding is high. I have no history with Holstein Friesian and fertility is my number one priority. I want to run a seasonal calf-based system and calf as many cows in the first week of February as possible.”
And grass and grass measurement is gold dust for his plans. “I have been measuring grass for seven years now and we have improved year on year. I have picked up good skills. The best thing is to be able to turn grass into money. It’s our cheapest resource. It’s also sustainable. A grass-based dairy system requires low input costs. Dairy can deliver and Ireland can compete on a world market.”
But his love will always be in beef.
“If I am totally honest my heart is in the beef business,” he said. “It’s a personal business decision to sell my suckler cows. To see them go, in terms of the work and breeding I put into them over the years was tough, but that is the unfortunate reality of the situation. The suckler herd is under pressure, there is no decent coupled payment and in my opinion there are not enough supports to maintain the suckler herd.”
Indeed, the former IFA livestock chairman estimated the suckler herd will decline further over the next number of years.
“My dairy conversion is a business decision. My heart is in the beef sector, I was very good at it but from a business point of view to secure a family farm income that is sustainable the dairy sector is going to offer me the best security in the future. I love calving cows. I love cows. I love breeding and seeing the results. And I like the challenge and excitement of dairying.”
With that Doran went back to the business of calving.
The AgriFood 2014 Conference, taking place tomorrow, is bringing top agriculture industry executives, banking strategists and farming interests together in a gathering of minds to explore sustainable investment options for growth and development. Doran is among key speakers including Irish Dairy Board CEO Kevin Lane, Glanbia Ingredients CEO Jim Bergin, Teagasc chairman Dr Noel Cawley, top dairyman Tom Clinton and Alan Jagoe will provide the farmer’s perspective.
AgriLand will be reporting live.