Is there a future for the 70-cow dairy herd in Ireland?
The 70-cow dairy herd will be below average, in terms of numbers in 10 years, but can it survive and provide a viable income?
Tom O’Dwyer, Head of Dairy Knowledge Transfer at Teagasc says factors such as cow type, the amount of grass grown and utilised, efficiency and set up are the factors that will determine if a small, 70-cow herd will be able to compete against the bigger producers.
He also said that it’s possible that dairy farming will be a part time job on the most efficient farms.
One labour unit can manage 150 LU on the most efficient farms”.
The 70-cow herd will be below average in terms of numbers but they will also be more common in 10 years, like what the 40-cow herd is today, O’Dwyer said. “They can survive low milk prices but they must be efficient, have a low cost of production and be set up correctly.”
Grass-based systems will be key to maximising profit along with a high EBI cow – 5.5 lactations yielding 420-450kg milk solids per year is what we need from a cow, O’Dwyer said.
A well-run dairy farm should generate enough income for a family, according to O’Dwyer and volatility won’t affect smaller herds any more than bigger herds.
Exposure to repayments will, in fact, be less. Revenues for smaller producers will be less but there will be lower levels of capital investment- it’s all in proportion to the herd size.”
There will be no protection offered by governing bodies such as the EU to smaller farmers being driven out of milk production by bigger producers, O’Dwyer said.
According to a recent national farm survery, farmers in 2015 had to produce 20% more milk to make the same amount of money in 2014.
However, Tom O’Dwyer said that there is a benefit for the farmer in expanding – the good years will outdo the bad years.
Maurice Walsh, a dairy farmer from Mitchelstown, Cork, milks 98 cows and is happy where he is for the time being.
He believes that the 70-cow dairy herd has a future in Ireland and a family can live off of it. This size of a herd can survive low milk prices as long as borrowings are kept to a minimum. Small herds like this won’t be squeezed out, Walsh says.
We’re living in a grass producing country and this is a huge advantage that we have in Ireland. If this advantage is fully utilized by the smaller herds especially, there should be no problems with smaller businesses leaving milk production.”
Maurice is holding off expansion to keep it a one-man operation. “Any more than 100 cows and you need another labour unit and I just can’t justify this.”
In Walsh’s opinion, volatility won’t affect the smaller dairy herd more. When asked where does he think expansion is most likely to happen in the country, Walsh said Munster in particular will expand or West Cork to be specific.
The producers and land type are here along with the milk producing tradition. Processors are in close proximity.”
“Milk price has definitely turned the farmer off expansion for now.” Maurice was milking 60 cows in 2003 when he took over from father. In 2013, Maurice milked 80 cows.
Maurice believes that there is a benefit to expansion and that we are better off with no quotas as we can then “get the most out of our land or in other words, maximise our capabilities.”
However, Michael Harlin, a dairy farmer, from KiIlmessan, Co. Meath says he’s not so sure about a 70-cow dairy herd supporting someone full time in the future.
Harlin, who is milking 120 cows and working part time elsewhere, believes that dairy farming part time is possible.
Harlin carries out all morning milkings himself and has full time evening milkers. Some help is also gained in the spring.
Expansion has already happened on this farm growing numbers from 50 to 120 today and 150 is the target.”
I will stay farming part time after expansion is finished here, Harlin said.
What the Processors say
On the processing side, Aidan McCabe, Farm Liaison Officer with Lacpatrick is confident that there is a future for a 70-cow dairy herd.
“I believe that herds ranging from 60-80 cows are the most efficient in the country. Sustainability is key and I think that this is a great example of a sustainability model.”
The best farmers in Lacpatrick are milking similar to this figure and there is a focus on increasing quality rather than quantity, McCabe said.
McCabe believes that the 70-cow herd will be small in 10 years’ time and that the upcoming generation will be the last generation to farm a herd of this size.
In order for dairy herds to survive into the future, it is essential that you breed the right type of cow for the system. Simplicity is key.”
Frank Hayes, Director of corporate affairs in Kerry Group, is very optimistic for the future of the small dairy herd in Ireland.
Hayes said the average supplier to Kerry group is 70 cows and this is a sustainable model, which is also economically viable.
Frank said those thinking of expansion in Kerry are not under the same pressure as farmers in other counties as the demand for land from beef and tillage farmers is not as significant.
However, Hayes predicts that Kerry Group suppliers will expand milk production by around 20% post quota.
In my opinion there is a benefit in expansion but only as far as 120 cows. Any more than that and you’re talking about significant reinvestment and employing another labour unit full time.”
He also said that keeping costs low is vital to surviving low milk price for any farmer today.