Price volatil­ity is a sure thing in dairy farm­ing

Irish Examiner - Farming - - DAIRY SECTOR - Joe Sheehy

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.

Christ­mas sea­son

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.

Crit­i­cal tasks

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

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