New entrant to dairying David Kirwan owns and farms 85 adjusted owned hectares in one block outside Stradbally in south Waterford. He is married to Isobel and they have three children — Ross, Jenny and Andrew. This is the first time the Irish Grassland Association (IGA) visited a new entrant to dairying as part of its annual summer dairy summer tour.

David claims to be no expert in dairying nor does he want what he has done held as a template for dairy conversions. His attitude to achieve success has been simply to work hard, seek information on what is considered to be best practice and implement this on his farm.

Net profit per hectare for the suckler enterprise from 2008 to 2011 averaged €50/ha (including a labour charge for David and excluding Single Farm Payment). It is expected to increase to €1,150/ha once the farm is fully converted to dairying.

David stressed that no one should expect stellar profits while starting up a new dairy farm if heavily borrowed. He also emphasised the huge workload involved in converting from beef to dairy; the farm is currently very labour intensive with development work happening alongside managing six different groups of dairy and beef stock.

David started farming in 1987. Over the years, he had tillage, sheep and sucklers on the farm but eventually he specialised in sucklers.

In spring 2011 he had 120 suckler cows and was part of the Teagasc/Irish Farmers Journal BETTER beef programme. He worked hard at maximising profit from the suckler herd and it was covering all variable and fixed costs but delivering a poor return for the labour and the land it required.

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In 2011, David successfully applied for the new entrant quota allocation of 200,000 litres. He milked 55 dairy cows last year and is milking 75 cows this year.

There are still 30 sucklers on the farm but post 2015 the farm will be 100% converted to dairy, carrying 150 cows and replacement stock.

Change

After 30 years as a suckler farmer, converting to dairying was a massive change for David. “We felt we had pushed the suckler enterprise as far as it could go in terms of profit,” he said. “The other issue was the desire to create a second income from the farm. My son, Andrew, is starting in Kildalton Agricultural College this September. I wanted to have a business that will at least give a successor the option to come home and farm.”

He added: “If no one wants to farm, my plan is to employ a full-time worker — two men working together can achieve a lot more than two individuals. Overall, I see the move to dairying as both simplifying my farm system and creating more profit from the land I own.”

Completing the budget of what it would cost to convert from beef to dairying and looking at what profit dairying could deliver over five years gave David the confidence to convert.

He said: “Don’t convert to dairying unless you have a sound financial plan, with realistic costs, that shows it will be worthwhile. We completed a budget with a milk price of 27c/l and at this milk price converting made financial sense. To date our budgeted costs have been very close to actual costs so the business plan is being closely adhered to.”

Organising bank finance as early as possible was another point David emphasised to anyone who needed to borrow money to expand. “From correspondence between solicitors to other factors, I found securing finance very stressful and time consuming. The earlier you start that job the better,’’ he said.

Cost of conversion

David had excellent facilities in place for his 120 suckler cows which drastically reduced the investment to start the dairy enterprise (Table 1). A slatted shed with central feed passage is gradually being converted to cubicles; 70 cubicles were added last year and the plan is to add 55 more next year. David completes the building work himself — each cubicle costs around €250 for concrete, steel and mats. There is plenty of slurry storage on the farm. Central farm roadways and a lot of reseeding work have been completed already. David is adding more roadways annually to create a grazing platform with excellent paddock access which will facilitate a long grazing season; cows can potentially graze on the farm from February to November.

The milking parlour is one of the biggest costs for a new entrant. David put up a building beside the slatted shed and in this put the milking parlour, dairy and a passage with a crush.

He completed a lot of the building work himself which kept costs low. Total cost for the milking parlour was €53,900 for a secondhand 12-unit milking parlour and €18,000 for a 12,600-litre bulk tank. David’s yard is located in the very centre of the farm so it was the ideal place for the milking parlour.

Has the extra work been worth it? This was the question put to David’s wife, Isobel. She said: “I can’t lie and David has been working harder since we started dairying. But when the transition is completed, we believe the system will be simpler to run. It’s also envisaged to have two people working on the farm. Whether that’s one of the kids or an employee, it should make David’s life easier. David enjoys working with the dairy cows too which is important. With this in mind we believe the change is worth it.”

Both David and Isobel are very grateful to local Teagasc adviser Seamus Kearney for all his help since they began planning the move to dairy, and would encourage any prospective new entrant to work closely with an adviser and be open to good external advice.

Sourcing right stock is key to success

For any beef farm considering converting to dairy, the current difference in value between the sale of beef stock and purchase of dairy stock is a big help.

In 2011, for every suckler cow David sold, he financed the purchase of 1.2 dairy cows. David’s first step was to buy 55 in-calf dry cows (from first to fourth lactation) in autumn 2011. Sourcing good stock from the one herd was one of the points David emphasised most on the day. He said: “I was determined to buy cows from the one herd to minimise disease risk; a new entrant has enough going on without treating sick animals and losing production due to illness. I have always been a huge believer in the importance of good genetics and knew the farm I was buying the stock from used a lot of AI and had well-bred stock. I know as a new entrant you have to minimise costs but, for me, it’s well worth paying for good stock. Your cows are the main part of your business and must deliver.”

Since then he purchased 29 more cows in 2013 and also bought 27 heifer calves to allow for a bigger jump in cow numbers in 2015.

David’s understanding of EBI is improving and he uses 100% AI every year. This year, his bull team averaged an impressive EBI of €250 (€76 milk, €125 fertility). His herd average EBI is €142 which is in the top 10% of herds in the country.Buying a mix of young and mature cows led to fantastic production in year one – 6,330 litres per cow at 4.18% fat and 3.48% protein (485kgMS/cow) on one tonne of meal. Most new entrants in their first year would expect much lower production. David knows it will be a challenge to maintain this production during expansion and explained priority access to grass was central to last year’s performance.