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With the quota shackles well and truly off, the drive for dairy expansion shows no sign of decline. Most well-run dairy farms are generating more cash than is needed for family living expenses. These farms are generating wealth. One could say that this is a golden age for dairy farming in Ireland.
One could also say, with some degree of accuracy that this phase is not going to last forever. Supply and demand dynamics will inevitably change as will regulations and environmental restrictions.
The percentage of grazed grass in the cow’s diet is what drives high profitability on the majority of dairy farms
For farmers to continue to generate wealth into the future, you must understand where profit is coming from at the moment.
The percentage of grazed grass in the cow’s diet is what drives high profitability on the majority of dairy farms. Of course, there are very profitable dairy farms in Ireland that have low levels of grazed grass in the diet.
What you tend to find with these farmers is that they are technically very good and also have a very strong work ethic. They would perform well in any system or in any industry. They have an excellent ability to make many daily decisions and get a lot of these right.
In a decision-heavy system of dairy farming, extra feed has to be brought in, whether that’s zero-grazed grass, silage, maize or some other feed
Not all farmers in decision-heavy farming systems are able to manage it well. I would be concerned that some farmers are sleep-walking from simple, grass-based systems into decision-heavy systems of milk production. In a simple grass-based system there are very few decisions to be made on a daily basis.
Cows feed themselves by eating grass. If they need extra feed at the shoulders of the year, that can be provided by feeding a few kilos of meal.
In a decision-heavy system of dairy farming, extra feed has to be brought in, whether that’s zero-grazed grass, silage, maize or some other feed. Basically, the herd needs more than just meal to fill a deficit in grass growth.
Stocking rate
The genesis of this is increasing the stocking rate on the milking block. This necessitates extra feed to be brought back to the platform to feed the cows. Distributing this feed will require machinery and operator time.
The time taken to do these tasks should not be underestimated.
It also takes time and money to construct and clean the feeding area where this feed is going to be fed. Extra slurry will be generated also.
The extra milk produced as a result of increasing the stocking rate will have a lower margin than the milk produced before the stocking rate was increased.
In many cases, the farmers would be better off staying still, rather than intensifying what was probably a simple and profitable system
This is because all of the extra costs involved should be put against the extra milk.
In many cases, the farmers would be better off staying still, rather than intensifying what was probably a simple and profitable system.
This is especially true if the extra feed used to keep the extra animals is coming from leased land.
In many cases, the price of leasing land bears no relation to the value of the feed being generated from it.
Scrambling to lease land, and paying over the odds to get it, just to complicate, work harder and make less money per litre of extra milk doesn’t make any sense in my book. It’s a different story to lease land that you can milk cows on.
Long-term arrangements
Dairy farmers can build long-term arrangements with other farmers for mutual benefit.
These arrangements include contract rearing of youngstock, buying winter feed on contract (silage, wholecrop, maize, beet, etc) and buying winter bedding.
Another option includes the contract-wintering of dairy stock. It is probably not in the grassland farmer’s interest to continuously sell silage and not get any organic manure in return.
This will deplete soil fertility. A better option could be to provide winter housing and feed for dairy cows.
This might involve converting existing beef sheds to cubicles. The animals would be the responsibility of the contract winterer while they are with him/her.
The advantage for the dairy farmer is that he/she is not tying up capital in winter accommodation.
The advantage for the winterer is that he or she is still farming and retaining nutrients on their farm with a guaranteed, regular income.
One notable disadvantage is that housing for all animals may not be on the one farm.
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