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Dairy feed usage in 2018 is estimated to have risen by 38% to approximately 1,400kg/cow as summer drought conditions reduced grass availability.
According to Teagasc’s Annual Review and Outlook 2019 an escalation in production costs and a weaker milk price resulted in an estimated net margin per litre of 9.8c/l in 2018. This represents a 34% reduction on 2017 levels.
Production costs
The increased production cost of 25.2c (up 11%) on every litre was driven primarily by increased feed expenditure. The higher usage, a higher feed price and increased cow numbers (estimated to be up 3.5%) contributed to a nearly 50% increase in feed expenditure per litre.
The pressure to produce additional late season grass and silage increased fertiliser use also. When this was coupled with the need to purchase more forage on some farms, pasture and forage costs per hectare are estimated to have risen 20%.
Milk production is also estimated to have increased by 3% for the year, with net margin per hectare decreasing to a national average of €1,227/ha.
Positive outlook
The outlook in 2019 is more positive. While the average milk price is predicted to fall by 5% – from 34c/l to 32.6c/l – a return to normal feed use should see an 11% reduction in production cost per litre.
Fertiliser prices are expected to rise by up to16%, though usage rates should reduce slightly.
Following the 3% increase in milk production this year, further growth in the region of 6% is forecast for 2019 . Overall, net margin is predicted to rise to €1,398/ha, an increase of 14%.
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