Ireland’s dairy industry has made substantial improvement in on-farm performance and national output over the past 10 years. Ann Hardy reports from the Ireland Genetics UK Dairy Conference.
Better grassland utilisation is one of the keys to managing milk price volatility and should form part of a strategy to build resilience into dairy businesses. This had been a key focus of Ireland’s project to increase performance and expand its dairy industry over the past 10 years, which was on schedule to meet its ambitious 2020 target ahead of time.
Speaking at the Ireland Genetics UK Dairy Conference in Gloucestershire, research scientist Dr Laurence Shalloo, from Teagasc’s Animal and Grassland Research and Innovation Centre, Moorepark, said Ireland’s best farms utilised 12-13 tonnes dry matter/ha compared with the average at about 8t/ha. This meant that because each extra tonne of DM utilised was worth €184/ha (£xxx/ha) in net margin, there was scope to earn an extra €900/ha (£xxx/ha) on the best compared with the average farm. On a 40ha (99-acre) farm, this was worth €36,000 (£xxx).
“That is hypothetical, but the point is there is absolutely huge potential to improve profits by increasing grass utilisation/ha,” he said.
Dairy cow fertility was another area with the scope to make a substantial difference, with one day slippage after Ireland’s ‘optimum’ mid-February calving date calculated to cost an extra €3.86/day (£xxx/day) (at a milk price of 29.5c/l).
He said the six-week calving rate should be the focus for block calving herds and the national average of 58 per cent represented ‘massive progress’, but was some way off the top herds at over 85 per cent and the target of 90 per cent.
“Every 1 per cent increase in six-week calving rate is worth €8.26,” he said. This meant improving from the average to the best was worth €264/cow/year or €26,400 (£xxx) for a 100-cow herd.
Other areas of focus included being competitive in terms of costs as a percentage of output.
Ireland’s costs at 77 per cent of output were among the best in the world, compared with other EU countries including the UK, New Zealand and America.
“The more competitive you are the better able you are to ride out the effects of volatility,” he said, adding that although 77 per cent was considered good when the milk price is poor, the target should generally be closer to 50 per cent.
Business factors also came into the equation and preparations could be made for volatility by actions such as fixing the milk price (which is a regular option in Ireland and emerging as an option in the UK), creating a cash buffer during the good times and reducing the farm’s breakeven milk price – or the price at which the business will start to suffer.
He said the breakeven point could be reduced by reducing costs or increasing the value of outputs.
Increasing milk solids production was said to have a particularly positive influence, with improvements achieved in fat and protein per cent in the national herd since 1990 (up from 3.55 and 3.20 to 4.03 and 3.05 respectively) said to be worth 4c/litre at a milk price of 29c/l.
Cash management was also said to be crucial to weathering volatility and he said investment should be planned and budgeted, and a cash buffer created.
“It is about putting money away pre-tax in the good years,” he said. “Don’t think when you are up here that you will never have a poor day again.”
UK dairy farmers needed clearer signals from the industry to give an improved sense of direction – in terms of both management and breeding.
This was a key conclusion drawn from the conference, where it was clear a central sense of direction in Ireland had put the country on course for the improved efficiency and rapid expansion of the past 10 years.
Performance per cow had soared from an average 3.7 per cent fat and 3.3 per cent protein in 2005, to 4.03 per cent fat and 3.5 per cent protein in 2015; cow numbers had risen from 1,025,450-1,239,000 over the same period (heifer numbers rising even faster) and overall milk solids production had risen (to 2016) by 39 per cent.
This left just a further 15 per cent rise required for the country to reach its ambitious ‘food harvest’ target of increasing output by 50 per cent (from the 2007-2009 base) by 2020.
Teagasc’s Dr Laurence Shalloo said Ireland’s A + B - C milk payment system (paying for the value of protein + fat minus volume) has been instrumental in driving up milk solids, and was widely used by processors, even those buying milk for liquid use.
This gave a clear indication of the market’s desired direction of travel, although he said such direction was lacking in the UK.
“There is no clarity [in the UK] in terms of what the farmer needs to be doing – producing solids or volume. Processors should be asking for solids irrespective of where the milk is going; if it is used for liquid they will take the fat off anyway.”
Dr Pat Dillon, Head of Teagasc’s Animal and Grassland Research and Innovation Programme said the background infrastructure had played a significant part in delivering the industry’s improved performance.
This saw all organisations involved – including milk recording, AI companies, milk processors, herd books, vets, slaughterhouses, health schemes, government research and genetic evaluations – all feeding into the country’s Irish Cattle Breeders Federation central database.
He said establishing this database had required innovative farmers and cooperatives to drive it forwards who had no political axe to grind.
He said the UK had the ability to create a comparable national database but there were too many commercial, vested interests involved who were not there for the industry’s sake.
There was no place for year-round calving herds in pasture-based systems, according to Teagasc’s Dr Pat Dillon.
He said the alternative, block calving systems, offered better grassland utilisation, more targeted nutrition, and more efficient use of labour, among their many benefits.
However, he said calving did not have to be in spring, but could be split into two, or even three, six-week blocks.
Accepting the UK’s substantial demand for year-round liquid milk, he said this could easily be supplied by spring and autumn block calving herds, and he suggested mature Cheddar and long shelf-life products may not need to be manufactured from winter milk.
Furthermore, he said there should be a drive towards producing milk from grass which was increasingly demanded by the market and came with additional health benefits through its fatty acid profile.