Price volatility is a sure thing in dairy farming
Farmers should plan for volatility in milk prices, while examining all possible options to maximise income and arrange cash flow in difficult times, in conjunction with your bank.
But there is generally good confidence in dairying. Much of this confidence is based on the world’s population growing rapidly and expectations that the demand for food, including dairy products, will increase as much as 40% over the next few decades. Most of the increase in demand will come from countries that have hundreds of millions of poor people whose wealth is improving. This why a lot of dairy farmers plan to increase cow numbers further. and many non-dairy farmers plan to change to dairying.
For them the drop in milk prices in 2015 and 2016 was a good warning of the necessity for serious planning before taking any big steps into dairying.
Sensible planning is the key to success, but it does not always happen. Unfortunately, a small number of dairy farmers are in financial trouble, due to over-expansion, with their troubles exacerbated by bad weather. Farmers who underfed their cows are particularly affected. International sources forecast volatile milk prices, between 25 and 35 cent per litre, for the next decade. Thankfully, such forecasters were wrong this year, prices have been much better than forecast.
But there is a global consensus that shortage of food and higher prices will be the experience in the foreseeable future.
Lets hope Irish farmers can avail of that situation, but there are possible obstacles.
Most of you will take things a bit easier with physical work over the Christmas season. A break from physical work often enables planning and thinking about the future. But the mental work such as planning can be even more stressful than physical work. There will be time after Christmas for the many important mental and physical management tasks to be carried out.
Don’t feel guilty about thinking and planning when you could be doing physical work. It is not a waste of time. It is a hallmark of successful farmers that they properly allocate time to planning and to physical work, and to adequate breaks from both. Some dairy farmers will be busier than others if they continue to milk cows into the winter, to avail of the relatively good milk price. With almost one third of our dairy cows calving after late March, this should not prevent an adequate dry period. However, other factors should be considered.
If the condition of cows is poor, or if silage quality is poor, the economic return from milking into January is unlikely to be profitable, due to the amount of concentrates that would be required to produce good quality milk.
On the other hand, if cows are in good condition, and silage quality is over 70 DMD, there is good profit to be made in continuing to milk late
“The drop in milk prices in 2015 and 2016 was a good warning of the necessity for serious planning before taking any big steps into dairying ”
calvers, if they are producing 12 to 14 litres of good quality milk from a few kg of concentrates. The labour situation must also be considered.
One of the most important and neglected areas of Irish dairy farming is herd health. Surveys indicate that herd health is a major determinant of profitability in dairying. Herd problems include mastitis, lameness, parasites, and relatively newer diseases such as BVD, IBR, Neospora, Johnes etc.
Every farmer should establish the health status of their herds through bulk milk and/ or blood tests, and should develop a heard health programme with their vet. Animal Health Ireland is working with all stakeholders to co-ordinate solutions to herd health problems. Their progress with eliminating BVD is very welcome. The original objective of eradication of BVD by 2020 looks very achievable, and it would be a great advantage for all the livestock industry. Progress is also being made in controlling and eradicating other serious diseases. Johnes disease poses a real threat to our dairy industry but is being tackled. Condition scoring (CS) of the herd gets a lot of attention, because more and more evidence is emerging that it has a huge effect on the health and performance of cows. Research and experience shows that it is critical to have cows calving down at CS 3 to 3.25 (too fat is as bad as too thin), and having a CS of 2.75 to 3.25 at service. Having the correct CS has been shown to increase milk yield as much as one gallon per cow per day, and to increase fertility rates as much as 50%.
I would like to take this opportunity to wish you all a very Happy Christmas
At the presentation of the Grassland Farmer of the Year overall award to John Macnamara, Knockainey, Co Limerick, his mother Mary, and children Conor, Padraig and Ailbhe, from left, award sponsors Liam Woulfe, Grassland Agro; Justin Mccarthy, Editor, Irish Farmers Journal; Agriculture Minister Michael Creed; Padraig Walsh, FBD Insurance (and chairman, Teagasc Grass10 stakeholder committee); Liam Herlihy, Teagasc Chairman; and Tadhg Buckley, AIB (SEE ARTICLE BELOW). Picture: O’gorman Photography