Head of dairy knowledge transfer in Teagasc Joe Patton says cost control and pasture utilisation were the two key drivers in the difference in profit margin in 2022.

Speaking at Teagasc’s National Dairy Conference, Patton outlined a survey which compared 100 dairy farmers for financial analysis. These farms were of larger scale and higher intensity than the national average.

Comparing farmers' eProfit monitors in 2022 with previous years, on average, herds produced 14kg MS per cow more than in previous years, but also fed 271kg more concentrate per cow.

Two reasons for the increase in meal fed were outlined:

  • 1. With the record high milk price, many farmers chased production and fed extra meal with the idea of getting a response to feed - with an average response of 0.35kg MS per every additional kg meal, this was not the case.
  • 2. Fertiliser costs were also at record high prices. Many farmers cut back on chemical fertiliser spread on farm, with no other change to demand in the system, meal had to replace pasture that wasn’t grown in 2022.
  • On average, 20kg to 25kg N/ha less of chemical nitrogen was spread on farms in 2022. Without a change to the system, such as improving soil fertility or more clover incorporation on farms, the deficit had to be filled somewhere and that came from concentrates.

    Joe Patton outlines the difference in costs in 2019 and 2022

    He illustrated the ratio of pasture utilised versus margin per ha through a graph. There is a strong positive relationship across years where milk price or cost bases have been very different.

    Patton felt a lot of farms lost focus in 2022 with the high milk price and he urged farmers to focus on grass utilisation and cost control, irrespective of milk price.