Future cost of production a concern for dairy farmers

The cost of producing milk over the next 10 years and general renewal are two of the main concerns Irish dairy farmers have for the coming decade.

IFA dairy chair Martin McElearney believes there is a positive future in dairying.

“Where I see it going – I think it’ll be fairly positive to be honest,” he told the Irish Farmers Journal.

“There’s a good outlook for food, the demand is there and we’re very good at producing it.

I’d be fairly confident that in 10 years’ time that the family farm model would still be in place also

“However, I don’t think we’ll have any handling on where our costs will be in 10 years time. What I also worry about is generational renewal. I worry that there won’t be enough young people to take on the farms.

“While we have some fabulously educated young people, I wonder if there will be enough.

“I’d be fairly confident that in 10 years’ time that the family farm model would still be in place also. That would be very important,” he said.

His comments were echoed by Irish Creamery Milk Suppliers Association (ICMSA) dairy chair Noel Murphy who believes the sector could be facing a situation where the younger generation don’t want to take on the family farm.

“There’ll be more consolidation too,” Murphy said.

Profitability

“There could also be some individual farmers who want to grow their business and start an enterprise on a second platform. A lot of it will depend on profitability.

“If there isn’t a decent margin, we could be in difficulty maintaining the current supply of milk, the volume of milk could drop.

“Costs are up around the 42c/l at the minute and if you’ve a base of 50c/l you can’t afford any more cuts. A viable herd 10 years ago was 50 or 60 cows. Now you need at least 100 cows,” he added.

The Irish Farmers Journal asked dairy farmers what they think the next 10 years holds for the sector.

James Slattery, Co Clare

“Farmers are getting older and there are no younger ones interested in getting into dairying. Farms will get bigger – that is if red tape and regulation doesn’t kill it first.”

Noel O’Connor, Co Kerry

“Quotas insulated us from many problems of a free market, but every day now brings new challenges. We’re sacrificial lambs now for access to other markets and again in the Russian war and next month in the Trump tariff wars.

“Add in attacks from our own government and EU authorities to prevent us growing by nitrate restrictions, dairying looks to be limited to shrinking margins and an inability to dilute fixed costs by increasing output.

“Where to from here? Diversification just leads to increasing workload for lower margin and climate change is going to limit food production in the future so is it best to move from predominantly grass-based to more production from bought-in cheap feeds?

“More questions than answers, I’m afraid.”

Ross Crowe, Co Meath

“I think we are heading into a very serious problem with the current age profile of dairy farmers and a lack of successors. As a young ambitious farmer with no direct access to a farm it’s almost impossible to get access to land/cows when leased farms are making €450-plus per acre.

“There are many farmers I know in the same position and if something doesn’t change a lot of potential milk suppliers will be gone. The sharemilking structure in this country is not up to scratch with farmers not willing to let go of control of the farm.

“In order for the industry to survive, we really need to look toward the New Zealand dairy structure which has a clear path for young farmers to advance within the industry. This doesn’t exist here.

“Environment implications are also a huge issue for the future of our milk supply. I think Irish farmers are heading in a dangerous direction in terms of increasing supplement to cows and moving away from our grass-based system.

“We need to bring things back to focusing on producing milk from grass and maintaining a low-cost structure.”

Brendan O’Connor

“I think there will be an average herd size of 230 cows. The derogation will be gone and there will be foreign labour living on-farm.

“I also think there’ll be six large co-ops processing milk.”