Dairy farmers should employ a book keeper, especially when one considers the scale of turnover of some dairy farmers, according to the Teagasc Head of Dairy Knowledge Transfer Tom O’Dwyer, who said it was “mind boggling” that some don’t.
“If hairdressers and plumbers employ bookers, why don’t some of our largest dairy farmers do so?” he said.
Speaking about the future of dairy production recently, Teagasc Director Gerry Boyle it’s important that as many farmers are possible use a profit monitor. He said it was a huge concern that so few farmers exercise even basic financial management procedures.
Both said there is a substantial range in performance across dairy farms with the margin per cow as high as €800 on high performance farms, but as low as €400 per cow on low performance farms.
However, Gerry Boyle said that high cost producers face severe challenges. “The implications are very clear for the high cost producers as prices look set to drop. Cost control is essential. Lower cost farms are more resilient and it’s important that farms try and build up cash reserves.
“We can’t emphasis enough the importance of cash flow budgets.”
Farming has to be more and more treated like a business, he said. “New Zealand dairy farmers talk business. That’s a key differentiation between New Zealand dairy farmers and us.
“Farmers are often doing things because they are required to do so under a scheme, but don’t use the information it gives them. They don’t take ownership of the information.”
The most recent survey from Teagasc shows that between 2015 and 2017 60% of dairy farmers are planning to expand. Of those, Teagasc estimates that about half will expand by 10-20% while about 30% plan to expand by up to 10%. Altogether, by 2017 the growth of milk will be of the order of 17%,” he said.
Less profitable dairy farmers need to double cow numbers to make the same profit that more profitable dairy farmers have, Tom O’Dwyer said.
He said that New Zealand has seen over the past five to seven years a drift from being focused on a grass rich system to a grass-poor type system. “When we did that analysis in Ireland we found that farmers following a grass-rich system would make a margin of €2,000/ha or more.
“There is still room for more grass in a cow’s diet and it starts with growing more grass and then using it. The key to increased grass growth is improved soil fertility.”