2025 proved to be a good year overall for dairy farming, with good milk prices, relatively good weather, and good prices for cull cows and calves.

However, the picture looks like it will be drastically worse in 2026, as milk prices continue to plummet fast and hard.

With a lot of spring calving herds now dried off and the milking year finished, it is a good time for farmers to carry out a farm performance review to look back at what they did right and wrong throughout the year.

This will be critical for next year, with tight cashflows leaving marginal room for error.

Farm finances

Ideally, farmers should always base their business off the bad years, as it does seem to be a trend in the Irish dairy sector.

Looking back to 2023, weather was extremely poor and fodder was tight.

This was paired with high costs and milk prices dropping hard throughout the spring and summer.

By the end of the 2023 year, Teagasc reported that the average dairy farm income had fallen to €49,500, a 69% decrease from the €108,000 reported in 2022.

Teagasc recently delivered its outlook for 2026, forecasting that the average dairy farm income could fall by approximately 42% to around €80,000 for the year ahead.

Despite farmers taking a massive pay-cut, this news offers a glimmer of hope in the tight situation dairy farmers currently face.

By using 2023 as a guideline for the year ahead, farmers can better plan around the cash discrepancies.

Teagasc have stated that having a €500/cow cash reserve will carry most farmers over the coming spring.

Farms should also be carrying out budgets or using profit monitors to know their costs and figure out how to control them, as it is easy to spend that money from a good year on items the farm needs - such as a new parlour or a set of new collars for the herd - that may not be viable in 2026.

Farm performance

All said and done, this coming spring will be a tough situation either way, therefore planning based on the farm's performance this year is essential.

Following the year, farmers should be asking themselves;

Am I overstocked on the farm?
Am I maximising the number of days at grass?
Did I feed too many concentrates?
Did I make too many, or not enough bales last year?
Are all my paddocks performing, do I need to reseed?
What paddocks need work in terms of nutrients and lime?

Grass and cows should always be the number one priority on every farm.

With money running tight, farmers may have no interest in reseeding, but if you are not getting the tonnage and quality out of that grass, you will pay for it in the form of concentrates.

Growing your own feed is one of the cheapest ways of fulfilling the cows' diet, so making the investment in grass is always worth it.

The same goes for the platform being overstocked, or if the right protocols are not in place to get cows out to grass on time and keep them out, in which cases you will only end up costing yourself in bought feed.

Cow performance

Thankfully, the news came this week that the derogation would be staying for another three years.

However, with tighter regulations, it is vital to ensure you are maximising the performance of your herd.

You should be asking yourself:

Is the herd achieving their milk solids target?
Am I milk recording and if not, should I be?
Am I happy with the cell counts?
Was there an issue with mastitis or lameness?
Am I happy with how the calving and breeding season went?
Are all the cows pulling their weight?

Look into ways of improving areas you are not happy with, such as changing your breeding programme, being more ruthless with cull cows, improving parlour hygiene, and adjusting diets and graze out to push milk solids.

At the end of the day, you will need to make careful and critical decisions to ensure the farm is running efficiently as possible this spring and ensure you are maximising your farm's margins.