Every year, Teagasc figures highlight the profitability challenges facing suckler and sheep farms and the dependency of both sectors on EU supports. As such, the contribution these sectors make to the rural economy is often not fully recognised either within Brussels or national Government.

In the Irish Farmers Journal, we have always tried to demonstrate the important role both sectors play in generating economic activity in towns and villages throughout rural Ireland and, as such, the dividend delivered from any investment made in the sectors at EU or national level.

At the same time, it is important to recognise the need for both sectors to operate efficiently inside the farm gate. We have consistently highlighted the need for a beef and sheep research programme that is focused on developing new technologies that improve farm profit – in the same way we have seen it delivered for the dairy sector.

There is of course an onus on farmers to show a willingness to take up these new technologies. We have little credibility demanding that the market pays a higher price for our produce or for farmers to receive more supports simply to prop up inefficient production systems.

Over the past eight years, the Teagasc/Irish Farmers Journal BETTER farm programme has demonstrated that improved technical efficiency does yield a financial return to farmers. However, in the Irish Farmers Journal, we are always looking to develop new initiatives that will help support the sector.

Adam Woods goes into detail on our decision to establish a 180-acre suckler and sheep demonstration farm in Tullamore, Co Offaly. The establishment of a suckler herd and sheep flock along with a commitment to a 15-year lease represents a major financial investment by the Irish Farmers Journal. But it is closely aligned to our mission statement: to improve the competitiveness of Irish farming and the wellbeing of those involved in the sector. We are committed to operating our farm with complete transparency and our specialist team will report regularly – both in print and online – on how the farm is performing. We will report the decisions we get right and those we get wrong.

While the profit focus will drive the decision-making process, we will also seek to explore potential production models that will help drive efficiencies in the key performance areas, including grassland management and labour. It will certainly be interesting to see if we can exploit the potential of mixed grazing, as demonstrated by the Teagasc work in Athenry.

Meanwhile, the focus of the breeding programme for the suckler herd will be to explore the potential for larger farms with a high herd health status to breed high-quality replacements for smaller suckler herds – without sacrificing the quality of our male progeny.

We have long questioned the advice to farmers with 10-15 cows to breed their own replacements. Established on the basis of the ICBF replacement index, we are hopeful that the suckler herd will give farmers increased confidence in selecting replacements on the basis of figures rather than visual assessment alone.

Ultimately the success of the farm will be its ability to give farmers confidence to adopt new technologies. This confidence will only be delivered through the transparent reporting of all financial figures and the ability of the system to generate a profit. IFAC will have full oversight and responsibility for generating annual accounts.

As we outline on page 41, the model of starting with a blank canvas with no cash and no subsidies is not one that any suckler or sheep farm could emulate. On this basis, even at full productivity, we forecast the farm will generate a cash surplus of just €8,500 per annum or €117/ha. However, included in this figure is full labour, rent and interest totalling over €90,000 per annum and no account is taken of the Basic Payment.

As we have shown on our Greenfield farm, even in a dairy context, when land, labour and full rental charge is accounted for, cashflow can pose a big challenge – obviously the challenges are more acute in the case of suckling than in sheep given their dependence on direct payments.

We would also hope that the profitability challenges the farm will face, despite the level of technical efficiency delivered, will objectively inform the Department of Agriculture and European Commission as they face into the CAP review.

Listen to a discussion of the project in our podcast below:

Listen to "Mixed grazing on Irish Farmers Journal demonstration farm" on Spreaker.