‘The system hadn’t a hope of being viable’

Five years after he switched to dairying, Ed O’Sullivan says there’s no going back to suckler farming, reports Martin Ryan

ED O’Sullivan should have been looking forward to a profitable future in suckler farming. In the 1990s he was producing finished beef at 12 months for a niche market returning a premium price.

His 27-hectare farm between Farranfore and Killarney was entirely devoted to an autumn calving suckler herd of 38 cows and their followers.

Yet, today the same farm is home to a herd of 80 high-yielding dairy cows, and looking back Ed knows he made the right decision a few years ago to say goodbye to the sucker enterprise.

“I am indeed happy to have left suckler farming,” he says.

“I am very sorry for the farmers who are trying to make a living out of suckler farming, because it is very hard to do that — but the problem with suckler farming is that most of the people have to have another income.”

Looking back to the ’90s, he recalls: “We were calving in the autumn and finishing all the progeny at 12 months. With the BSE at that time we were getting 30p/kg more to finish under 12 months, but once they hit their first birthday they were hit on the price straight away, so in order to maximise the return we have to be out by 12 months.

“We had Limousin first cross and were using a Blonde d’Aquitaine bull that was giving us 70pc U grade and 30pc were killing as Rs; going for that niche market gave the best return.

Feeding

“To finish at that age we were feeding the weanlings in excess of a tonne of meal on average.”

It was the era of EU support payments based on headage, which he was actively working to maximise and supplement the income from the finished beef.

“We were making the best use possible of the ‘ premia’ system that was in operation at that time and drawing about 40pc of the suckler cow premia on heifers each year,” Ed says.

“On a small scale (of farm size) we had to make the most of what we had and we were maximising it to the hilt to draw down as much as was possible in premia within the scheme regulations.”

Although he was entitled to a good single farm payment per ha on the change-over to the land-based system, he realised that it was being eroded.

“When the change came we changed to selling the weanlings at 10-11 months of age and the target was to get them to around 500kg and sell for €2.20 to €2.30/kg; we cut back on the amount of ration we were feeding and reduced the costs,” he explains.

Because of the drop in the direct payment, he felt that the cost of keeping the suckler cow was too high relative to the return that he was going to get.

“Taking a heavy hit on what we were getting, we had to look to what we were going to do,” he says.

“I was already looking at changing because the system hadn’t a hope of being viable. The costs were going up and we could get the output at a level that would leave a reasonable return.

“The impression at the time was that you needed 100-200 acres to be a profitable dairy farmer. The general impression was that dairy farmers were all big farmers. Initially I thought that the acreage I had was too small to go into dairy farming.”

Doing the suckling well, he reckoned that he had €100 to €150/cow profit, and losing out on the supports he was going nowhere on the acreage that he had to work with.

Then he looked around and realised that his farm size was not far away from the average in the area on which dairy farming had become the main enterprise.

The farm was a mix of some very good land and some low-lying heavier soil types.

“In 2012 we made up our mind that we were going for dairying and in 2013 we decided to go ahead, and were successful in getting an allocation of 200,000 litres milk quota under the new entrant scheme,” he says.

“We bought another 82,000 litres to avoid paying a super-levy, because I was able to buy the quota at around 15c/l and the super-levy would have been around 28c/l so in that way it made sense.”

2013 was a bad year on milk price and he did a lot of work around the farmyard, putting in cubicles for 70 head and a 12-unit milking parlour and 2km of farm roadway, before buying 60 cows from a herd with 20 years of breeding stock — knowing the farmer, he was confident they would establish a good base for the milking herd.

In 2014 he went well over the milk quota, taking the chance on it which just worked out for him, and he avoided penalty.

In 2015 he went up to 72 cows and availed of contract rearing for the calves, which relieved pressure on the land base, and this year milked 80 cows.

“We went for high EBI crossbred cows so what we have now is high EBI Holstein and Jersey cross-bred, because the crossbred are very suitable to our system and they are working out very well for us,” he says.

Genetics

“We are now made up of about 60pc Holstein genetics, about 35pc Jersey and the rest are made up of other breeds like Montbeliarde and Rotbunt.

“The way we are going is to move towards all cross-breds because we are in a high-rainfall area and the cows have a long walk on the farm as well — I find that the cross-breds are more efficient in our system.”

Ed is producing 1,380kg/ ha over the whole farm, with meal feeding averaging around 750-800kg/hd — it went up to 1,200kg in 2018 because of the drought — and constituents of 4.65pc butter fat and 3.87pc prrotein is giving a price of over 46c/l because of the high solids, with yields expected to finish 2018 at over 500kg of solids/cow.

“We can go higher but I don’t believe in increasing numbers and find that I have to increase the ration feed — I don’t believe in increasing cow numbers unless I can see that they are going to leave a profit,” he says.

“In suckling, our overheads were about half what they are now but our fixed costs on the number that we could carry were actually higher than they are now. I don’t think that it can be justified to carry a suckler cow because the costs are too high relative to the return you are going to get, and I don’t see a premium of €200/cow doing anything other than making the situation worse, because suckler farming is losing too much money.

“It wouldn’t be feasible for every suckler farmer to go into dairying because they may not have the land base or it may not be suitable, but there are other options.”

Meanwhile, Ed is pressing forward with plans to keep 90 high-yielding cows on a few acres more than that occupied by the former 38 suckler cows and their followers.

Whatever the future holds, there’s no going back to suckler farming, he says.