Editorial: combining the power of our dairy and suckler sectors

The abolition of milk quota and the widening of the income gap has driven a wedge between our two largest sectors: dairying and suckler beef production.

It is unfortunate, as both sectors have much more to gain from working together rather than going off in separate directions.

It is true that when compared on a per hectare basis, there is no comparison in the income-generating capacity of a well-run dairy enterprise versus a suckler beef system – with the differential now at €1,500/ha.

In this regard, the opportunity that the abolition of quotas has presented for some beef farmers can only be viewed as a positive. For too long, farm families were restricted from maximising the income-generating capacity of their land by being shut out of dairy.

However, it would be foolish to think that every farmer is in the position to make the switch or indeed would reap the same financial dividends as the typical dairy farmer. Land type, fragmentation and family structure – eg part-time farming – are all important aspects that cannot be ignored. It should also be acknowledged that our suckler sector underpins the image of our national beef industry. In doing so, improved market access for beef, from the dairy and suckler herds, is delivered – and with it higher prices.

It is worth noting that in Germany, where the vast majority of beef originates from the dairy herd, the O-grading steer price is currently averaging €3.24 excl VAT or 25-30c/kg behind the equivalent price in Ireland.

At farm level, we have a scenario where the industry needs to ensure we continue to find a consumer-friendly way of bringing the increased numbers of male calves through to beef.

At the Teagasc national beef conference on Tuesday, Donagh Berry highlighted the fact that there are now over 400,000 more cows calving down in the dairy herd, concentrated during the spring months. Those who think a cull calf scheme is the solution to dealing with these additional calves obviously have no understanding of just how important consumer perception is in maintaining markets.

Maintaining a social licence to farm is an important aspect that is often forgotten and other countries – such as New Zealand – have learned this the hard way.

Meanwhile, on the suckler side, we have a large swathe of suckler farmers who are committed to the sector. However, these farmers face the same challenge as suckler systems the world over: low levels of output relative to the cost of keeping the suckler cow.

Is it a case of going back to the future? Double suckling but not as we know it?

Therefore, rather than moving in opposite directions, it is clearly worth looking at how both industries can better work together. However, collaboration in the long term will only be maintained if whatever models are developed are profitable. Key to delivering this will be ensuring that the calf coming from the dairy herd is healthy and has the necessary beef traits to deliver an end product that returns beef farmers a viable margin.

For this to happen, we need to manage the trend where an intense focus by dairy farmers on short gestation and calving ease has seen the quality of calves, in terms of growth rates and carcase conformation, reduce.

As Adam Woods reports, Donagh Berry gave a detailed presentation on the dairy-beef index and its role in helping beef farmers identify calves with superior beef traits. However, the elephant in the room is how the index will work in a scenario where a high percentage of dairy farmers do not record sire data. Is it time to have a discussion on the merits of DNA-testing calves at birth? At €22/head, it would be a cost on the system but one that would reduce by 40-50% if rolled out nationally.

The cost should be measured against the value of the industry and the potential to identify genetics that can deliver progeny with an added €100 per head profit potential.

Along with development of the dairy-beef index, we also need to explore all the options as to how we blend increased numbers of progeny from the dairy herd into our suckler system. Dairy calf-to-beef systems and/or contract-rearing undoubtedly offer potential, but again the advice cannot be prescriptive. Contract-rearing and/or dairy-beef systems are not suitable for every farmer and becoming totally reliant on a trading system brings with it new challenges, especially in the current environment where the genetic beef potential of the dairy-bred calf is in decline.

Neither should we ignore the skillset and labour required to take young calves from a dairy farm and rear them to 14-16 weeks without incurring major health checks.

So, are there other options? Is it a case of going back to the future? Double suckling but not as we know it? Accepting that many suckler cows have inadequate milk to rear one calf, there is a significant proportion of the herd that could be mobilised to rear two calves, at least to 14 weeks of age, at which point the dairy calf could be weaned?

Fostering is obviously a problem and given demands on labour, the day of standing with a cow morning and night is gone. But surely it is not beyond the powers of modern research to find a solution that would temporally break the hormonal bond between the cow and newborn calf, allowing for a second calf to be introduced.

It is clearly an area where more research is needed and we need to think outside the box for solutions.

This week, Bord Bia leads a trade mission to Indonesia and Malaysia with the aim of promoting Ireland as a leading source of dairy, as well as to carry out market research around the meat sector in both countries.

Bord Bia has identified Indonesia and Malaysia as priority markets for Irish food exports in the years ahead, based on the rapidly growing economies and populations of both markets.

As Lorcan Allen reports from Jakarta, Indonesia is an enormous market with a population of 265m people (the fourth largest in the world) and a rapidly expanding middle class. While dairy consumption in Indonesia is very low, it’s still a major dairy importer based on population alone and demand is growing in double-digit figures every year.

However, awareness of Ireland in general, let alone as a source of high-quality dairy ingredients, is low in the country. While Guinness is the bestselling dark beer in the market, virtually no Indonesian consumers knew it was an Irish brand.

As such, Bord Bia and the Irish dairy industry has work to do in building Ireland’s name as a go-to source of high-quality dairy ingredients among Indonesia’s key dairy buyers and importers. On top of this, Irish dairy companies will also face stiff competition from dairy giants such as Fonterra, FrieslandCampina and Arla, which are long established in the country.

Despite these challenges, Bord Bia is confident that Indonesia is a market that will start to deliver significant opportunity for exports of Irish dairy ingredients such as SMP and whey powder in the coming years, which will be critical as Irish farmers continue to expand production.

At the Teagasc national beef conference, figures were released on a study which looked at anthelmintic (wormer) resistance across 24 dairy-beef farms. While there has been debate around resistance issues in cattle to wormers, these results show it is there and we must now take note.

The study looked at each of the three wormer categories and found resistance across all three. The most startling finding was resistance to ivermectins (clear drenches) across all 17 farms tested. This is an early warning and as is the case in our sheep flocks, we have issues where some of the parasites have adapted genetically to become resistant.

While the problem is hopefully in its infancy on most Irish farms, the latest data cannot be ignored. Functioning anthelmintics are key to maintaining animal health in our grass-based production systems.

On Tuesday 20 November we host Dairy Day in Punchestown. While many dairy farms in the east have had one of their worst years on record, we must strive and challenge for long-term stability.