As we move into the no-quota era, profit generated per farm or per hectare will be the best measurement of farm profitability, not profit per litre.
Figures 1-3 and 4-6 represent the 2014 profitability on spring and winter dairy farms respectively. Remember these are Profit Monitor figures and only approximately 1,600 of the 18,000 (9%) dairy farmers completed profit monitoring, so these are our best, most financially focused dairy farmers. National average figures will, in the main, be lower.
Comparing previous results would suggest the profit per hectare from this subset of farmers would be 27% higher than the average dairy farmer. Before we start looking at the results remember when Teagasc describe and talk about Profit Monitor figures really it is the margin left to pay for own labour employed in the business, living expenses and financial repayment costs.
For the spring-calving farms, the average net profit per hectare was €1,806/ha, rising to €3,255/ha for the
top 10% of producers.
In 2014, the winter milk producers did better, delivering an average of over €1,900 per hectare and €3,400 for the top 10% of producers.
Spring calving farm
results – in brief
The top 10% of farms generated a gross output of €6,091/ha compared to €4,392/ha on the average farm, a difference of 39%. The higher output on the top farms reflected higher stocking rate, higher output per livestock unit and higher output per hectare.Output per ha on the top 10% of farms was 303kg milk solids per ha or 35% higher than on the average farm (872kg per ha). This is as a result of a higher stocking rate (+0.49 LU/ha) and higher output per LU (+ 40kg milk solids per cow).Average spring milk dairy farms had lower variable costs than the top farms at €1,437 per ha versus €1,669 per ha. However, as a percentage of gross output, they accounted for 33% on the average farms compared to 28% of the output on the top farms.The gross margin was €4,422/ha on the top spring milk farms, which was 50% or €1,467/ha higher than those on the average farm.The biggest variable cost on spring milk dairy farms in 2014 was purchased forage and concentrate, accounting for 35% or €497/ha of total variable costs.The average spring milk dairy farm in 2014 generated a net profit of €1,806/ha compared to €3,255/ha on the top 10% of farms.Winter Milk farm results – In Brief
The top 10% of farms generated a gross output of €6,767/ha compared to €5,188/ha on the average farms, a difference of 30%.The higher output on the top farms reflected higher stocking rate, higher output per livestock unit and higher output per hectare.Output per ha on the top 10% of farms was 263kg milk solids per ha or 26% higher than on the average farm (999 kg/ha). This is as a result of a higher stocking rate (+0.35 LU/ha) and higher output per LU (+ 41kg milk solids per cow). Average winter milk dairy farms had lower variable costs than the top farms at €1,811/ha versus €2,059/ha. However, as a percentage of gross output they accounted for 35% on the average farms compared to 30% of the output on the top farms. The gross margin was €4,709/ha on the top winter milk farms, which was 39% or €1,332/ha higher than those on the average farm.The biggest variable cost on winter milk dairy farms in 2014 was purchased forage and concentrate accounting for 47% or €843/ha of total variable costs.
As we move into the no-quota era, profit generated per farm or per hectare will be the best measurement of farm profitability, not profit per litre.
Figures 1-3 and 4-6 represent the 2014 profitability on spring and winter dairy farms respectively. Remember these are Profit Monitor figures and only approximately 1,600 of the 18,000 (9%) dairy farmers completed profit monitoring, so these are our best, most financially focused dairy farmers. National average figures will, in the main, be lower.
Comparing previous results would suggest the profit per hectare from this subset of farmers would be 27% higher than the average dairy farmer. Before we start looking at the results remember when Teagasc describe and talk about Profit Monitor figures really it is the margin left to pay for own labour employed in the business, living expenses and financial repayment costs.
For the spring-calving farms, the average net profit per hectare was €1,806/ha, rising to €3,255/ha for the
top 10% of producers.
In 2014, the winter milk producers did better, delivering an average of over €1,900 per hectare and €3,400 for the top 10% of producers.
Spring calving farm
results – in brief
The top 10% of farms generated a gross output of €6,091/ha compared to €4,392/ha on the average farm, a difference of 39%. The higher output on the top farms reflected higher stocking rate, higher output per livestock unit and higher output per hectare.Output per ha on the top 10% of farms was 303kg milk solids per ha or 35% higher than on the average farm (872kg per ha). This is as a result of a higher stocking rate (+0.49 LU/ha) and higher output per LU (+ 40kg milk solids per cow).Average spring milk dairy farms had lower variable costs than the top farms at €1,437 per ha versus €1,669 per ha. However, as a percentage of gross output, they accounted for 33% on the average farms compared to 28% of the output on the top farms.The gross margin was €4,422/ha on the top spring milk farms, which was 50% or €1,467/ha higher than those on the average farm.The biggest variable cost on spring milk dairy farms in 2014 was purchased forage and concentrate, accounting for 35% or €497/ha of total variable costs.The average spring milk dairy farm in 2014 generated a net profit of €1,806/ha compared to €3,255/ha on the top 10% of farms.Winter Milk farm results – In Brief
The top 10% of farms generated a gross output of €6,767/ha compared to €5,188/ha on the average farms, a difference of 30%.The higher output on the top farms reflected higher stocking rate, higher output per livestock unit and higher output per hectare.Output per ha on the top 10% of farms was 263kg milk solids per ha or 26% higher than on the average farm (999 kg/ha). This is as a result of a higher stocking rate (+0.35 LU/ha) and higher output per LU (+ 41kg milk solids per cow). Average winter milk dairy farms had lower variable costs than the top farms at €1,811/ha versus €2,059/ha. However, as a percentage of gross output they accounted for 35% on the average farms compared to 30% of the output on the top farms. The gross margin was €4,709/ha on the top winter milk farms, which was 39% or €1,332/ha higher than those on the average farm.The biggest variable cost on winter milk dairy farms in 2014 was purchased forage and concentrate accounting for 47% or €843/ha of total variable costs. 
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