Purebred Danish Jerseys arrive in Ireland

Teagasc has bought Danish Jerseys to establish a new elite purebred Jersey herd in Moorepark. Fifty-eight purebred Jersey maiden heifers arrived into Ireland this week.

Denmark, Sweden and Finland all share a common breeding index called the Nordic Total Merit index (NTM). This index is similar to the EBI in that it analyses multiple traits and is based on economic values for each trait. Therefore, production and health traits constitute a large part of the NTM index. The aim of the index is to produce long-living and high-producing cows.

For the Jersey breed, production accounts for 39% of the NTM. While milk volume has a positive weighting, so too does kilogrammes and percentages of fat and protein, so it is not too dissimilar to the EBI in that regard. Fertility traits account for 16% of the NTM index while fertility in the EBI accounts for 35% of the total. This reflects the lower importance of fertility in all-year-round calving systems and the fact they are coming from a higher fertility base than the Irish herd.

Health accounts for a massive 39% of the index, whereas in Ireland health only accounts for 3% of the EBI. Udder health alone accounts for 20% of the NTM, again reflecting the importance of udder health and its contribution to longevity in all-year-round systems. Health traits have been a component of the NTM index since 1985.

Moorepark researcher Frank Buckley, who is heading up the elite Jersey herd in Moorepark, says the heifers chosen for Ireland were not necessarily those with the highest NTM heifers available: “We worked with VikingGenetics [the main breeding company in Denmark] to re-evaluate the Danish population of 10- to 14-month-old purebred Jersey heifers based on the weightings for different traits within the EBI.”

A list of heifers was compiled and 58 were purchased once agreement with farmers and all necessary health screens were passed. While the actual EBI of the imported animals is not yet known, it is likely that they will be approaching €200 on average. One of the main objectives of the new study will be to see how the Danish heifers perform under Irish farming systems, considering their proof is based on a confinement system. Previous research would suggest that while proofs will go up and down, the best sires in a confinement system will still be the best sires in other systems (meaning there should be little enough re-ranking).

In addition to the imported Jerseys, over 100 purebred Jersey embryos from New Zealand have been imported. Moorepark already has a herd of about 60 high-EBI purebred Jersey cows, but the plan is to double the size of this herd over the next few years.

Dairy farming in Denmark

The attitude to farming and risk is totally different in Denmark. Danish dairy farmers are big spenders. They are among the highest-cost farmers in the world, largely driven by massive debt servicing costs. Average debt levels on Danish dairy farms are in the region of €12,000/cow while in Ireland it is less than €1,000 per cow.

Most of the debt in Denmark is on land, buildings and machinery. The structure of land transfer in Denmark facilitates such high debt levels. Sons or daughters of farmers who wish to take over the family farm do so by purchasing the farm from their parents. This clears the parents’ debt and transfers debt to the next generation.

Over 90% of the milk in Denmark is processed by Arla Co-op. At the moment, milk price is 29.5 c/l for standard milk, but Jersey milk with constituents of 4.1% protein and 6.1% fat is worth 37c/l. Despite base milk prices being higher than the base price in Ireland, the Danish farms I visited were all operating at a loss. Cost of production for the average farmer is in the region of 40c/l when you include own labour and debt servicing costs.

So with the current low milk prices and high costs of production, the vast majority of Danish dairy farmers are making a loss.

Dysfunctional

The farmers I visited in Denmark are having regular discussions with their banks. Most are only paying back the interest on their loans. Overdrafts are being extended and some overdrafts are being converted to long-term loans and new overdraft facilities are being made available to these farmers.

While the farmers welcome this support from the banks, there is still huge uncertainty over how long more each farmer can survive at low milk prices. The big issue is asset value. The land market in Denmark is dysfunctional at present as land is not being sold. This is helping the banks’ balance sheets to some extent as book values on land remain relatively high, in or around 2014 levels of €9,300/acre. However, this figure is still a long way short of the €20,000 per acre Danish land has been valued at in the past, and hence the pressure on some individual farmers is enormous.

In real terms the market value of land is probably much less, but how much less is difficult to say as there are very few farm transactions. Where a bank holds the deeds to a property, it will not allow the sale of land for lower than the debt attached to it. And on the other hand, banks are not approving loans for new land purchases at current milk prices. The policy appears to be to sit and wait for milk prices to rise again.

To make matters worse, whatever buildings are on the farm are not counted as assets on the balance sheet. So if a farm borrowed €1m for a new cubicle shed, the debt is attached to the land but the cubicle shed has no value from the bank’s point of view.

Farming differences

The differences between dairy farming in Denmark and Ireland is stark. For a start, just 12% of the farmed area is in grass, with the rest growing crops of one kind or another. Over 55% of the total farmed land is under cereals and 7% is under maize silage.

The vast majority of the 500,000 dairy cows are housed full-time. Average yield per cow is almost twice that in Ireland at 9,000 litres per cow per year. Cows calve all year round. This is high-input, high-output and high-cost dairy farming.

There are about 3,000 dairy farms in Denmark, producing just over 5bn litres of milk per year. Average herd size is 176 cows per farm, more than double the size of the average Irish dairy farm. The major breed of cow is Holstein Friesian, which makes up about 70% of the national herd. The next major breed is Jersey, with 70,000 or 13% of the national herd being purebred Jersey.

Despite the debt levels and low milk prices, Danish farmers are still passionate about what they do. They love farming and most of the people I met are still happy to be farming. On-farm practices haven’t changed since the downturn in milk prices. Labour has been reduced on some farms but in most cases they are carrying on regardless.

Nearly all of the big herds are housed in modern cubicle sheds, with cow comfort to the fore. Many herds are milked through robots. Feed is top-quality total mixed rations of maize and grass silage with concentrate feeds. About half of the diet is made up of grains or concentrates.

Cows are fed using diet wagons or automated feed bins with hoppers running on tracks that go all around the feed passages and return to be filled from centralised feed stations. Some of the farms also have automated dispensers for putting chopped straw or sawdust in to cubicles. Other farms have Lely machines for pushing in silage and scraping passages.

The standards of hygiene, animal welfare, quality of feed, cow body condition score and cow type was excellent on most of the farms visited.