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Milk price can make or break new entrants to dairying, according to dairy farmer and owner of Agri Design and Planning Services Aidan Kelly.
Originally a beef and sheep farmer, Kelly decided to turn his efforts to milking five years ago.
“It’s a big commitment to make the conversion. Thankfully, we are receiving much higher returns for the hours we put in.
"You’d need to have 120 sucklers to make the same as what 20 dairy cows can.
Investment
“For a 100- to 150-cow farm, new entrants are looking at a €250,000 to €500,000 investment, depending on what existing buildings are on site. A quote for anything less would be unrealistic.
"It’s a big commitment, taking most entrants on average seven years to pay off completely.
“Each dairy cow can be expected to make between €700 and €1,400 per year.
If milk prices were to drop below 25c/l, that would be enough to bankrupt a new entrant
"Milk price can make or break new entrants.
"I was lucky in my first year. We received 40c/l so we could get working on the debt straight away.
"With that said, no one has a crystal ball and if milk prices were to drop below 25c/l, that would be enough to bankrupt a new entrant," he told the Irish Farmers Journal.
Experience
With first-hand experience of conversion, Kelly is able to lend his knowledge to new entrants with his company.
“I help the farmer from the initial planning right through to the finished working farm.
"Our services extend as far as grassland, water and road mapping.”
The Tipperary-based farm design company is responsible for the conversion and installation of over 100 dairy farms each year.
The expanding dairy herd has shown no signs of slowing down, with many farmers opting out of beef and entering the dairy sector.
With eight years of experience in farm design and planning, Kelly has been in high demand, aiding farmers with their conversions.
“I’ve never been as busy. We are building for three applicants each week," he said.
Grasstec
Meanwhile, Cork-based farm design company Grasstec has also noted the spike in demand for dairy builds.
"The business is still growing. We are building 50% more than last year alone," said Grasstec director Bertie Troy.
"On an average week, we work on 15 to 20 farms, [with] milking parlours making up eight of these.
"Most parlours are being built on farms converting from beef to dairy.
"Suckler farmers and beef finishers are making the move to dairying because of the lack of income involved with keeping cattle.
"Farmers making the conversion have to be at the right age, it’s a big investment.
"Most dairy farms we are working on are in the midlands, with around 100 to 120 cows.
"Business hopefully will remain consistent for the next few years.
"Farmers are beginning the planning stage now, so we are already looking toward construction in 2021.
"A hard Brexit could slow growth and create a lot of uncertainty, so we are hoping it passes without creating difficulty," he said.
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