'Enormous potential for dairying'
Published 16/03/2016 | 02:30
The potential for Brazil to produce dairy products is simply enormous.
All the natural advantages for confinement dairying or pasture-based dairying are readily available, large tracts of available land, cheap fodder and concentrate feed, cheap labour and a domestic market which imports 1billion litres of milk per annum.
So why is Brazil not mentioned in the same breath as New Zealand, Ireland and the USA when it comes to flooding the world market with milk? The answer is simply tradition, there is no track record of productivity in the Brazilian dairy industry.
It is fascinating to see how antiquated the industry is when compared with the soya machine.
Nobody really knows how much milk is produced in Brazil and it is thought that as much as one third is what is known as 'non-formal milk' is produced, this is milk which does not go through a registered milk processing facility, it is sold to neighbours or bartered for other goods and services.
The circa 23bn litres of what is known as 'formal milk' is of very poor quality and it is thought that over 50pc would not meet Irish quality standards. The milk is treated to an extent that the flavour is diminished perhaps perpetuating the existence of non-formal milk.
They have some crazy practices like letting the calve suck the cows in the collection yard before milking to stimulate the cow to let down milk, dual purpose breeding and sometimes deciding not to milk the cows at all. Ticks and parasites are a problem and bulk collection of small volumes with huge distances to travel to the nearest milk processing facility do not help matters.
Some American, Dutch and New Zealand farmers have recognised the opportunity in Brazilian dairying and are producing, processing and marketing milk on the domestic market to have control of the entire chain. Predictably the Americans and Dutch have followed the confinement dairying model and the New Zealanders the pasture model, it will be interesting to follow the progress of these pioneers.
Fonterra the giant New Zealand Co-op has abandoned a pasture based project in Crystalina to milk 3,000 cows on 450ha.
They purchased and developed the land, imported embryos from New Zealand implanted them in local cattle, calved them and did not put them in calf, the cattle are now sold and the land is for sale for R$20,000/ha (€1,955/acre).
In summary Irish dairy farmers will not have to worry about Brazilian dairy farming for a few years yet but it may not be a bad place to invest if one has entrepreneurial ambitions.