The academy of success
First to speak was Department of Agriculture‘s Colm O’Cribin, assistant principal on rural development.
“In my opinion for what it is worth there are huge opportunities out there. I am sure you are all sick of hearing about Harvest 2020 but there are huge opportunities with the ending of dairy post quota. The sector is gearing up for it and we are hoping over the next few years to be ready for it and we know it is coming. It has to be prepared for and that is the opportunity there for us.”
O’Cribin noted that the challenges will always be there. “There is a world out there, it is not just the Irish market you are dealing with,” he stressed. “Some 80 per cent of what we produce goes abroad. It is a much more global level than the field next door.”
Irish Dairy Board economist Mark Faherty pointed out that Ireland is producing the same amount today as approximately close enough to when quotas were introduced in 1984. “And in that time New Zealand has tripled its output and than encapsulates the opportunities we have. Not just over the next five years but over the next 10, 15 years, the next 20.”
According to Faherty, Ireland has two major advantages. “Ireland is coming into is the next phase of growth and world demand is really kicking off in a way of when New Zealand was growing. It was a world fraction of what it was today and the growth was only a fraction of what it was today. So we have the supply factors available and the demand factors are winds in our back over the next five years, so I think we are perfectly tee’d up for a very positive next five years and not only that but the next 10 years.”
He said milk production in Ireland had been held up by “the guts of a generation”.
“There was a lot of relatively easy gains in milk production compared to other major producing regions. But compared to New Zealand, compared to The Netherlands, Ireland has a lot more to give so we can get more milk,more easily to keep up competitors and that sets us up for the next five years.”
AIB’s head of agri-propositions and strategy, Anne Finnegan, said the bank fully recognises all the opportunities. “We are trading on a world market. There is a demand for what we produce and how we produce it. This is the challenge for the Irish sector whether you are a farmer, a processor or supporting the sector in some way.”
Among the challenges she noted was volatility in terms of what might be experienced. “At a much greater level than we have seen before. The volatility we have seen since 2007 both in output and input prices, difficulties farmers in this country have never had to deal with before in their business. As an industry at all levels how we manage that is going to be critical going forward.
She continued: “It would be a remiss to not talk about prices. We look at 2012, the volatility broaden out with the weather in this sector and it was something in my lifetime that was unprecedented. All of those challenges need to be planned for they need to be managed for farmers. You need to work with a buffer with your business to allow you some fat to deal with the unexpected. It is going to come and we want to support the industry and the entire sector through the cycles knowing that when in the good years there will be lean years to come aswell.”
She also encouraged farmers present to plan ahead. “Now is the time to be factoring all this in. It’s too late if it arrives at your door, so you need to plan now. We know it is going to come.”
Next to speak was EY Entrepreneur of the Year 2013 finalist, Sam Shine, founder of Samco, who said investment is a big hurdle for farmers preparing for dairy expansion, particular young farmers.
“Of course there is an opportunity in Ireland. There is a massive chance to increase output in our milking. Don’t get me wrong, there is just a massive market out there that Ireland will be affected by some of the crisises that are spoken about, such as volatility on world markets, but the demand is there.
“We see it with Samco. There is just a massive market. Of course that is the opportunity but are the young farmers today up for that, physically free in terms of output and how you do that. The investment is a big challenges as the young farmer today has to invest so much, in cows and buildings, to physically get up there into that production.
He continued: “People have to understand that, when they are investing and trying to double cow numbers to double yields is not always going to work. Like cows you see in other countries is enormous, where people do it right.”
He also referred to large tranches of unused land that perhaps, in his opinion, should be used better. “I would say that there is a lot more land available, there is a lot of land not used in Ireland and it has to be utilised better.”
Cork-based dairy farmer Kevin Twomey, chairman of the Dairy Discussion Groups of Ireland and member of Teagasc top-level dairy group, stressed that each individual farmer should focus on their own business.
“But very ‘sure-footed’ on what you want to do and the reasons why you want to do it,” he cautioned. “I think it is vital each as individuals, businesses and families have that individual focus in developing our business and the reason is to do with volatility. We cannot lose focus of our natural advantage and that lies in our low cost of production and we must maintain that over all others. It is the one thing we have over the rest of the world.”
He did acknowledge the “massive opportunities for production”. “The challenges are to keep control of our cost base. It’s not a sprint. I feel people are sprinting at the moment. It is a time to take stock, develop our plan, stick to it and deal with the risks involved. We should de-risk our business and I don’t mean that in a negative way but in a very positive way. Actual understand the risk of the fund and the volatility of the market, the volatility of the weather, what we can do, what are the buffer zones. It is vital we build these into our business and we build our knowledge in how we can farm better and more productive.”
Twomey also noted new technologies and innovations will be key. “You cannot dismiss that. We can’t just have a black and white view of the world. Technologies change. We must change. We must adapt, everything moves on. But one thing I will say, is bear in mind what is happening, New Zealand enterprises effectively doubled in four years, but they are still in the same margins. That is a real fact and you have to bear that in mind. Just because prices are good there is a savage business-related drive to take that money back out of our pockets, that is just the nature of the business world. Keep forcing on your business, be clear on what you want and the rewards you want.”
The DCU Ryan Academy developed the Farm Entrepreneurship and Leadership Programme last year.
It gives farmers and farm leaders an opportunity to gain an insight from thought leaders and industry experts in topics including: developing business plans, financial management and funding models, risk management, leadership and management, ethics and succession planning, entrepreneurship and innovation for sustainable business.
The panel discussion also discussed a range of issues from animal health, land ownership and challenges facing young farmer. More reports to follow on AgriLand.