Experts warn cash is key to cope with dairy market volatility
Building up cash reserves and signing up for fixed milk prices are some of the strategies being adopted by Ireland's next generation of progressive dairy farmers to cope with future dairy market volatility.
Philip Feeney, Brendan Muldowney, Ann Marie Doheny and Gary Nolan farm in England, Scotland, the US and Ireland, but all insisted that cash was the best protection they could have in coping with milk price swings.
"The biggest cushion you could have is cash and in order to take some hardship you need a cushion," remarked Brendan Muldowney, who milks 500 cows in Scotland with his wife Maureen.
US-based young dairy farmer Gary Nolan urged expanding Irish dairy farmers to only make capital investments where there was a return to be made.
"Anybody can increase production, but it doesn't always put more money in your pocket," he warned.
"I would be afraid that in the next few years some farmers, when the green acre comes up next door, will go for it no matter what. Instead, they need to measure the return from it before they make any decision."
Mr Nolan and his wife Siobhán are share-milking 1,800 cows in Missouri and plan to increase to 3,140 cows in 2014.
"Over the past five years we've recorded a 32.5 per cent return on equity," he told the conference.
Waterford farmer Philip Feeney, who runs a 500-cow herd in partnership in Cheshire, England, warned dairy farmers intending to expand to concentrate on their technical efficiency first.
"I would want to be in the top 10pc of technical proficiency before I would even think about increasing cow numbers because if you don't have it at 50 cows, you're not going to improve at 150 cows," he warned.