Garrigue McCullough: let’s apply a bit of perspective estimates 60pc drop in dairy income

  • Garrigue McCullough: let’s apply a bit of perspective estimates 60pc drop in dairy income
    FarmIreland.t. E.
    The Committee’s assessment that dairy incomes will fall by 60pc this year was severe enough to make headlines. But dairy farmers are not the worst-after a drought this year.
    https://www.independent.ie/business/farming/dairy/darragh-mccullough-lets-apply-a-bit-of-perspective-to-estimates-of-a-60pc-drop-in-dairy-incomes-37190523.html
    https://www.independent.ie/business/farming/article37082764.ece/09f62/AUTOCROP/h342/2018-07-05_bus_42253096_I1.JPG

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The Committee’s assessment that dairy incomes will fall by 60pc this year was severe enough to make headlines. But dairy farmers are not the worst-after a drought this year.

I agree, no one likes to see their income fall of 60pc, but let’s apply a little of the other side. The fall in comparison to 2017, which was the most profitable year for Irish dairy farmers, with an average annual income of over €90,000.

There will be some on there that indicate that labor is 1.4 units on average on a dairy farm and that dairy farmers work more than 40 hours in a week, and that they pay for the new investment of farm profits.

But the profits still kick-ass compared to any large farm enterprises. So much so that many dairy farmers will have a large enough cash pile from last year to hold them through 2018. Even with an income of “only” €45,000 is projected for the average farmer this year, anyway, 50pcs better than the average income level in 2009, and equal to that achieved in 2012 and 2016.

Some have seized on the shortage of feed this year as concrete proof that the dairy herd in Ireland has grown too large. After the abolition of milk quotas, the national herd has increased by almost 40pc to 1.45 million cows, the average herd size is almost the last 15 years has doubled to about 83 cows.

This expansion has left all but the most strategy under severe pressure. But it has also allowed farmers to obtain large rewards when things go well, and in 2017.

Let’s have no illusions that the farmers had a lot more fodder to spare, if this drought hit at a time as the regime of milk quotas remain in place.

All that would be different, more feed was used to feed the reinforcing animals is kept on dairy farms. The milk checks would be smaller with less milk pool, and it would be even less money to buy additional feed.

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Farmers can bear my expense to feed grew by €10,000 per month’

Bill farmer feed increased by 10 000 euros per month compared to the same period last year due to the drought.

In reality, most affected farmers this year, the weather is not suckling men located on the East and South, where the drought most affected.

They suffer from lack of feed as strong as the dairy people, but they suffer a double whammy of falling prices for beef and growing account feed.

If you passed the full beef farmer annual income of 45,000 euros per year (not to mention the complex in 2018), he probably took the hand and all of you.

So my sympathy is with the farmers now, even if the whole analysis, how to cope with the drought and what can be done, again to not get the same attention will be focused on the dairy industry.

Review last farmer week was harsh, but quite true: “do more, do better or get out.”

It can be argued that the decrease in scale can also be a reasonable option. It is one that You do not hear of milk processors never suggest, because the more milk they come in the door, the better for overheads.

But from personal experience, I never saw turn made the operation more profitable in the long term.

Of course, he can do the job less stressful and possibly long fingers further expansion until there is more sustainable options from the point of view of the earth or Extra help.

But smaller units are difficult to meet quality of life aspirations of young farmers who want regular hours and time. Small farms also struggle to justify the investment required to keep pace with the latest technology, machines and rules.

Therefore, most dairy farmers left with the possibility of becoming more in the last few years. I can’t see many people prefer to cut because of 2018.

Having said that, I also think that it would be foolhardy for farmers to cling to the idea that the weather forecast in 2018 was one in 40 years.

I said Ireland three times in a row in the summer in the 1860-ies, which were drier than this year. So even before considering the warnings from the scientists about climate change, the possibility of more droughts in the next decade higher than we would like to admit.

Farmers also need to understand that they can afford less risk, as their business becomes more and more. It turns out that they simply must do better in preparing for this over the type year. It’s not Mission impossible stuff.

For a start, dairy farmers should create silos reserve 20pcs size of its total annual needs.

Whether this be accomplished in the next 12 months when buying in silage, taking more land, or reducing non-core livestock to the farmer.

The biggest hurdle for most is getting over the psychological block of tying up to €40/cow in feed that they usually do not require.

But if it makes sense to have an electricity generator as a backup for any disruption, and insurance on your farm and the car having a cover when it comes to filing a plan is not an option, especially now that rates are higher in large herds. This is the same logic that Greenfield demo herd in Kilkenny used when they decided to create a cash reserve to cope with price volatility. There’s just too much at stake in connection with external factors that farmers have no control over.

When I mention Greenfield, it is worth noting that grass growing month in 2013, after the dry summer, was in October.

So while most of the farms down on 2tDM/ha / day off grass, all is not lost for 2018, while the growth rate of 100kg/ha is still possible in the next couple of weeks.

Garrigue McCullough farms in Meath and presented the ear to the ground on rte television

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