The annual Irish Grassland Association (IGA) National Dairy Conference, sponsored by Yara, is taking place today (Wednesday, January 18), where nitrates legislation and banding is being discussed.
The conference is underway at Charleville Park Hotel, Co. Cork, with three sessions focusing on: Where to from here; Technologies to future-proof dairy farming; and Productive swards in a low-nitrogen era.
The cold spell currently gripping the country did not deter a large crowd of farmers and industry experts from attending the event.
IGA conference
One of the first presentations at the event was given by Noreen Lacey, head of banking with Ifac, who outlined how the new environmental measures introduced this year are going to impact farms financially.
During her presentation, Lacey outlined how the new nitrates banding will use the milk yield/cow to determine the amount of organic nitrogen produced/cow.
Lacey advised farmers to determine how this will affect their farm, if they have not already done so.
Case study
Lacey then outlined a case study which was completed by Ifac, to look at a farm in the higher band, if the derogation stocking rate (SR) is reduced to 220kg/ha of organic nitrogen (N).
The example used is a farm milking 112 cows on 40ha, with an average yield of 6,800L.
Current farm profile Higher banding scenario Reduced SR to 220kg/ha of N Cow numbers 112 94 83 Whole farm size (ha) 40 40 40 Kg/ha organic N 248kg (89kg) 247kg (106kg) 220kg (106kg) Stocking rate (LU/ha) 2.49 2.35 2.08 Yield/cow (L) 6,800 6,800 6,800 Annual supply 761,600 639,200 564,400 Income Cattle sale €23,352 €19,599 €17,306 Milk sale at 50c/L (incl. bonuses) €380,800 €319,600 €282,200 Total income €404,152 €339,199 €299,506 Costs Feed cost 1.35t/cow at 440t €66,528 €55,836 €49,302 Fertiliser €29,333 €26,658 €23,994 Other variable costs €45,696 €38,352 €33,864 Fixed costs €129,472 €129,472 €129,472 Total costs €271,029 €250,318 €236,632 Profit €133,123 €88,881 €62,874 Percentage drop income 0% 33% 53%
In this analysis, the fixed costs are not changed, which was question raised by a number of farmers in the audience.
But Lacey noted that although you could reduce this cost slightly based on cow numbers reducing, it would only result in a small change to the overall figure.
The analysis outlines that if a farm enters the highest nitrates band, it will reduce farm profits by 33%.
If the same farm’s maximum derogation stocking rate is reduced from 250kg of organic N to 220kg of organic N, it will reduce farm profits by 53%.
Options
The first option outlined by Lacey is to lease an additional 8ha of land and maintain cow numbers at 112 cows.
This additional 8ha has a cost of €750/ha and would decrease farm profitability by 5% (€127,123 profit in this scenario) – the farm stocking rate would be 2.33 in this scenario.
The second option outlined by Lacey would be to reduce milk produced by the herd during the year. By reducing feeding rates by 150kg/head in August and September, this should reduce milk yields by 300L/cow.
In this scenario, the cow number is reduced to 108 cows and the area farmed remains at 40ha and the stocking rate is 2.7LU.
Milk yield/cow is reduced to 6,250L/cow and 675,000L overall; this would result in a farm profitability reduction of 23% (€102,411 profit in this scenario).
Concluding, Lacey stated that the outcome of the review will be individual for each farm enterprise and emphasised the importance of completing such a review in order to determine the potential options.
She also advised farmers to contact their agri-advisor to gain a better understanding of what may be required.