New analysis by ifac on the financial implications of the cut to the nitrates derogation has found that dairy farm profitability could be cut by up to 37% if cow numbers are reduced as a result of the changes.
Based on a typical 50ha farm keeping 114 cows and carrying replacements with an organic nitrogen stocking rate of 247kg organic N/ha, 14 cows would need to be culled in order to comply with the cut. This would reduce profitability by 37%.
The analysis suggests that leasing additional land would be the least costly option, with an assumed cost of €300/acre.
If an additional 6ha was leased, cow numbers could stay the same but profitability would still reduce by 12%.
Head of farm support with ifac, Philip O’Connor, said that getting heifers contract-reared would allow for extra cows to be carried on the milking platform, but that profitability would still reduce by 15%.
The analysis was based on current costs of production and a base milk price of 35c/l and average farm performance.