The Irish Creamery Milk Suppliers Association (ICMSA) AGM is next Friday. It will be addressed by Ornua CEO John Jordan, who no doubt will recount the insatiable appetite globally for our dairy produce.
He will be joined by Dr David Styles of the University of Limerick, who has calculated that Irish farming can reach its sectoral target without a cut in the national herd.
I happen to believe Dr Styles is correct. We can absolutely reach our sectoral target, or at least the lower end of the range of our sectoral target, without cutting the national herd.
But we cannot reach our sectoral target if the dairy herd grows, as has been predicted by the Irish Cattle Breeding Federation (ICBF), to an estimated 1.84 million cows by 2027. Not without a complete collapse in the suckler herd.
Nearing the ceiling
Minister Charlie McConalogue will also address the meeting. It seems a lifetime ago since he spoke to the IFA AGM, but it was only this January. That day, he warned that we were nearing the ceiling of dairy expansion.
Since then we have had the sectoral targets, which followed the summer's climate action bill in their turn. We have also seen the difficulties encountered having our nitrates action plan for the next four years accepted - we now seem likely to only get a two-year plan over the line and not before March of next year. The potential for dairy expansion has narrowed considerably, we seem tol be very close to where words of warning will progress towards something more definite and defining.
If we are to reach our destination, Teagasc is the NASA that will get us there
The warning signs are there for the dairy sector. Will the Minister revisit the theme next Friday, and if so, will he speak more directly? And have farmers heard the warning and understood ?what it means?
Forget the pantomine villain that Ciaran Cuffe provided this week, when it emerged that he had written to the banks advising them not to provide finance to dairy farmers. Yes, farmers need to wrest control of the narrative from the "dairy is bad for humanity and bad for the environment" brigade, but the reality is that the overwhelming majority of Irish people consume dairy and have a positive image of dairy farming. As do the overwhelming majority of people across the European Union.
I have previously made comparisons between the challenge facing Irish farming in reducing it's carbon ouitput by one quarter and the US space programme of the 1960s. If we are to reach our destination, Teagasc is the NASA that will get us there. And it seems likely that mission control won't be Moorepark, who provided the blueprint for dairy expansion, but Johnstown Castle.
This is not in any way anti-dairy farming. No-one works harder than dairy farmers. No sector of Irish farming is as far up the world rankings as our dairy farmers.
Indeed, there is hardly another sector of Irish industry in any sphere as far up the world rankings as dairy farming is. No other sector is as profitable at farm level as dairy farming is.
No sector has a fraction of the control of their own business than dairy farmers have. Should the Glanbia Co-op proposal to buy the plc out of Glanbia Ireland go ahead, Irish dairy farmers will entirely own the processing of their milk, with the exception of Kerry. Ornua is owned by the co-ops, who are owned by farmers.
We cannot have a situation where 115,000 farmers reduce their carbon footprint, while 5,000 other farmers increase theirs
But it has to be accepted that we cannot have a situation where 115,000 farmers reduce their carbon footprint, diligently following the MACC curve, while 5,000 other farmers increase theirs in an unfettered manner.
If that happens, we won't reach our carbon reduction targets. Not a hope. We are already three years into a 13-year cycle, when you consider that 2018 is the base year. We have lost ground in that time - emissions have risen.
Following seven years of rapid expansion at farm and processor level, the Irish dairy sector is facing a period of retrenchment. It is being forced by the need for farming overall to cut its carbon footprint, but it might be looked back on as a good thing, a chance to take stock and evaluate the next phase.
Of course, we need opportunities for new entrants to start milking cows. We also need room for younger farmers who are taking on smaller herds to expand to have a viable income.
But to create that room, other dairy farmers will have to accept that, for now, dairy expansion will have to be mainly restricted to those categories.
The success story of dairy expansion, at farm and processor level, has been remarkable and should be acknowledged. It has been driven by Moorepark, with our grass-based model a cause for national pride and celebration.
But we are in a new phase now, a phase that won't last forever. We will see countries such as Ireland encouraged to maximise their natural advantage for dairy production in the 2030s, I'm sure of it.
I think Minister for Agriculture Charlie McConalogue needs to say that clearly, soon. I think the dairy co-ops need to say it too. I want the chairs and their boards to show leadership.
If we fail to reach our sectoral target, John Jordan or his successor may be reporting at an ICMSA AGM in the not-too-distant future that the gloss is going off our dairy sector internationally. Kerrygold may lose its glitter. The stakes are higher than many might realise.
Is trouble brewing on them there hills?
There may also be some dangers on the horizon for farms at the other end of the spectrum of our industry.
I've been at meetings where the Save Leitrim campaign has made its case against the afforestation of its county.
It holds that the incentives in place for conifer plantations have attracted non-local, and even non-Irish, investment to buy or long-term lease land to plant a monoculture of endless sitka spruce across the hills of its beautiful county. What has that to do with CAP reform, I hear you ask.
Well, let's just look at the payments as currently proposed on a farm of average size - 35ha, on marginal land.
The Basic Income Support for Sustainability (BISS) will be a minimum of €96/ha in 2023. To that, we can add the Complementary Redistributive Income Support for Sustainability (CRISS) (front-loading) payment of €44/ha on the first 30ha. Eco-scheme payments will be worth a further €70/ha or so.
The Department is currently projecting eco-scheme payments at €74/ha, although that forecast was before the news broke on Thursday of new qualifying measures that make the schemes more widely accessible.
This will probably lower payments. Eco-scheme payments will apply on every hectare. That gives us a grand total of €7,130.
To this we now add the area of natural constraint (ANC) payment. For 2023, on mountainous land, it is set at €148/ha on the first 12ha and €112 on the next 22ha. So our 35ha farmer maxes out at €4,240.
That gives our farmer total payments of €11,370 in 2023. That is an average of €325/ha on the 35ha holding. If the farmer has sheep at the minimum stocking rate of one ewe per hectare, and qualifies for the ewe maintenance payment, that will push payments by another €10/ha. If it's more highly stocked, the targeted payments would be higher.
In 2027, the BISS will have risen to €136 under convergence (85% of the average €160/ha payment). Total payments will have risen to €12,790, an average of €365/ha from Pillar I and ANC payments alone.
What's wrong with that, I hear you ask. Nothing in itself. This is the direction the CAP is going in, as agreed by the European Parliament, the Council of Ministers and the European Commission. The farmer will be expected to maintain the land in an environmentally friendly manner.
The importance of marginal farmland in rebuilding better biodiversity lies at the heart of the national action plan. Low-output, low-input farming on more marginal land might be transitioned to organic farming, triggering access to the €260m supports now in place.
There is also the likelihood of a payment in a Pillar II agri-environmental scheme. This could pay up to €10,000 per annum.
The danger lies in the attractiveness of this land to investors. More marginal land can be bought for €3,000/ha at present. Even if this price rises to closer to €5,000/ha, the yield on such an investment would be 10% or close to it.
For people with personal wealth, land is a good asset to invest in. This is particularly true as a means of wealth transfer - all the next generation has to do is to complete a green cert/Level 6 course to qualify for agricultural relief.
There is also some cachet in the rich buying land and rewilding it. The BBC had a news piece from the Scottish Highlands this week, where it is becoming quite the phenomenon.
'Green lairds' are buying up vast tracts of land, perhaps to salve their conscience regarding the nature of the accumulation of their wealth.
We need to do something to safeguard farmland from being bought up by non-farmers. The Irish Farmers' Association (IFA) made some interesting proposals in its recent pre-budget submission that are worth close examination.
The unforeseen consequence of CAP reform delivering higher payments to our most marginalised farmers on our most marginal land could be swept away by land-hungry virtue signallers.
Save Leitrim could become Save the Hills or Save the West. I don't know that anyone wants that.