We should be under no illusions as to the level of change taking place on Irish dairy farms. As reported in recent weeks in the Irish Farmer Journal, growth in Irish dairy output is surpassing even the most optimistic projections – to such an extent that some milk processors are already planning further investments in processing capacity so as to be able to efficiently handle the continued growth in the sector.
With the exceptions of a price crash last year, achieving the rapid level of growth has been relatively plain sailing. In general, expansion plans have been disciplined and Teagasc figures on cost of production show farmers have efficiently expanded their herds – largely by holding true to the grass-based production model.
Teagasc National Farm Survey figures show that while debt per dairy farm has increased slightly, debt per kilo of milk solids has reduced during this expansion phase. Hence, Irish dairying looks to be in a very strong position and there is no sign that the pace of growth is going to slow in the years ahead. Despite falling 25% due to the collapse in milk price, at over €1,000/ha, net profit from dairying in 2016 will be at least three times that of even the most efficient tillage, suckler and sheep operators. Even in a crisis year, dairying is outperforming other sectors.
For many farmers, the growth has been based on maximising the grazing platform through the removal of an alternate enterprise – in the main, beef or tillage. This has seen the average dairy herd size increase over the past four years by 30% to 75 cows. In many cases, the removal of an alternative enterprise has simplified the running of the farm as well as improving profitability.
Further expansion will pose more complex challenges – not least the fact that growth plans will be increasingly reliant on whole farm conversions and/or various leasing, partnership or share farming agreements. While such arrangements will present their own issues, the biggest will be farmers having to rely on others to manage the growing workload.
A plan for this is just as important as the plan for what needs to be invested to milk extra cows. Many farmers are expecting far too much of themselves and others in terms of what is a sustainable workload. Páidí Kelly of Teagasc has clearly identified the knock-on effects:
Farmers are working too hard, in the spring especially, and cannot invest enough time in making the important management decisions around calving, breeding and grassland that will secure the profit from their larger-scale business. This workload is also not good for their physical wellbeing. Employees are being asked to work long hours, sometimes in farms where facilities haven’t yet been upgraded to match increased cow numbers, and decide there is a better career outside of farming, making a potential labour shortage problem worse.Long working hours are setting a very poor example to the next generation, many of whom are also deciding that a career outside of farming is more attractive.The workload of any farmer is more influenced by decisions made around labour on the farm than the number of cows being milked. Contracting some or all of the machinery work and/or simplifying the farm system further by getting heifers contract-reared are obvious solutions.
In whatever form it comes into the farm business, labour is going to become an increasingly important factor in delivering growth in the dairy sector. With approximately half the dairy cows in the country now milked in herds of greater than 100 cows, and with this cohort showing the greatest appetite for further growth, we must be innovative in finding different solutions to ensure the sector can attract and retain labour which, with unemployment heading for below 6%, is becoming an increasingly scarce commodity.
To ensure Irish dairying can continue to grow in a sustainable manner, we need an industry action plan that will help ensure Irish dairy farms are enjoyable places to work, that Irish farmers have the skills to effectively employ labour and that Irish dairy farming has a positive image which will help attract all types of people to a career in dairying.
The pace of dairy expansion has perhaps caught us off guard in preparing for this problem. We need coordinated industry action from the Department, Teagasc and farm organisations to effectively address it. It is also the responsibility of every farmer to treat people well on his or her farm (a working relationship with an employees is very different to that with family members) as the reputation of dairy farmers as employers will be built from the ground up. The scale of Irish dairy farming is changing rapidly and we need to change how we approach work on farms to keep up.
We should be under no illusions as to the level of change taking place on Irish dairy farms. As reported in recent weeks in the Irish Farmer Journal, growth in Irish dairy output is surpassing even the most optimistic projections – to such an extent that some milk processors are already planning further investments in processing capacity so as to be able to efficiently handle the continued growth in the sector.
With the exceptions of a price crash last year, achieving the rapid level of growth has been relatively plain sailing. In general, expansion plans have been disciplined and Teagasc figures on cost of production show farmers have efficiently expanded their herds – largely by holding true to the grass-based production model.
Teagasc National Farm Survey figures show that while debt per dairy farm has increased slightly, debt per kilo of milk solids has reduced during this expansion phase. Hence, Irish dairying looks to be in a very strong position and there is no sign that the pace of growth is going to slow in the years ahead. Despite falling 25% due to the collapse in milk price, at over €1,000/ha, net profit from dairying in 2016 will be at least three times that of even the most efficient tillage, suckler and sheep operators. Even in a crisis year, dairying is outperforming other sectors.
For many farmers, the growth has been based on maximising the grazing platform through the removal of an alternate enterprise – in the main, beef or tillage. This has seen the average dairy herd size increase over the past four years by 30% to 75 cows. In many cases, the removal of an alternative enterprise has simplified the running of the farm as well as improving profitability.
Further expansion will pose more complex challenges – not least the fact that growth plans will be increasingly reliant on whole farm conversions and/or various leasing, partnership or share farming agreements. While such arrangements will present their own issues, the biggest will be farmers having to rely on others to manage the growing workload.
A plan for this is just as important as the plan for what needs to be invested to milk extra cows. Many farmers are expecting far too much of themselves and others in terms of what is a sustainable workload. Páidí Kelly of Teagasc has clearly identified the knock-on effects:
Farmers are working too hard, in the spring especially, and cannot invest enough time in making the important management decisions around calving, breeding and grassland that will secure the profit from their larger-scale business. This workload is also not good for their physical wellbeing. Employees are being asked to work long hours, sometimes in farms where facilities haven’t yet been upgraded to match increased cow numbers, and decide there is a better career outside of farming, making a potential labour shortage problem worse.Long working hours are setting a very poor example to the next generation, many of whom are also deciding that a career outside of farming is more attractive.The workload of any farmer is more influenced by decisions made around labour on the farm than the number of cows being milked. Contracting some or all of the machinery work and/or simplifying the farm system further by getting heifers contract-reared are obvious solutions.
In whatever form it comes into the farm business, labour is going to become an increasingly important factor in delivering growth in the dairy sector. With approximately half the dairy cows in the country now milked in herds of greater than 100 cows, and with this cohort showing the greatest appetite for further growth, we must be innovative in finding different solutions to ensure the sector can attract and retain labour which, with unemployment heading for below 6%, is becoming an increasingly scarce commodity.
To ensure Irish dairying can continue to grow in a sustainable manner, we need an industry action plan that will help ensure Irish dairy farms are enjoyable places to work, that Irish farmers have the skills to effectively employ labour and that Irish dairy farming has a positive image which will help attract all types of people to a career in dairying.
The pace of dairy expansion has perhaps caught us off guard in preparing for this problem. We need coordinated industry action from the Department, Teagasc and farm organisations to effectively address it. It is also the responsibility of every farmer to treat people well on his or her farm (a working relationship with an employees is very different to that with family members) as the reputation of dairy farmers as employers will be built from the ground up. The scale of Irish dairy farming is changing rapidly and we need to change how we approach work on farms to keep up.
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