Thursday 29 September 2016

Grazed grass is the key to survival in the low milk price landscape

Published 13/01/2016 | 02:30

Large crowds at the Yara sponsored Irish Grassland Association Dairy Conference in Limerick.
Large crowds at the Yara sponsored Irish Grassland Association Dairy Conference in Limerick.

Last year was a rollercoaster for dairy farmers. Having started out in January with an acceptable milk price of around 30c/l we were immediately faced with the dreaded superlevy problem due to being 'over quota'.

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This forced us along with a lot of other suppliers to milk the cows once a day till the end of March as there was no point producing milk if you did not get paid for it.

April 1, 2015 heralded a new era and brought an end to 30 years farming under the constraints of milk quotas.

There was great optimism that this would be a milestone leading to expansion of 50pc in dairy output over the next five years and the achievement of the government target in the 2020 food harvest report.

While the country has massively increased milk output perhaps by as much as 15pc in year one milk price has continued to collapse to its present level of 25c/l with no recovery in sight yet. Throughout 2015 we were told all the co-op's supported milk price and cushioned us from market reality but they have used up all their reserves in doing so. Having started at 30c/l it will come in at over 28c/l for 3.6pc fat and 3.3pc protein.

The grass growth in 2015 was exceptional due to higher than average temperatures and sufficient moisture at all times throughout the growing season.

Unfortunately the last two months have seen unprecedented levels of rainfall resulting in horrendous flooding countrywide so hopefully all the different bodies responsible for waterways in this country will come together and find a solution to the problem

We live in a small country and most of the flood water can get to the sea quickly if our rivers were maintained and a few new channels dug.

Getting back to farming we need to prepare our dairy businesses for the extreme challenge that lies ahead in 2016. I believe it will be a much more difficult year to manage than 2015 for three reasons.

Firstly, most dairy farmers had a contingency fund built up at the end of 2014.

Secondly, milk price will start lower this year and thirdly, the grass is unlikely to grow as well or as consistently resulting in more expensive supplementation at times during the year. Based on these assumptions we must get our mindsets into survival mode. We as dairy farmers have no influence over the price we are paid for our milk so I believe it is critical that we focus our energy on areas we can influence.

I strongly believe grazed grass is the key to surviving in a low milk price situation.

There has never been as much grass on farms going into mid-January.

We must strive to get cows to grass as soon as they calve in February and convert as much of it as possible into milk. There is no quota this year so while the price is low at least we will get paid for every litre.

Set up your Spring Rotation Grass Planner and follow it. This is a well proven tool to get you to the end of the first rotation usually early April and not run out of grass for the cows.

If you are not already using a Spring Rotation Planner it is the one guaranteed action you can take to reduce costs because you will make better use of the grass, feed less meal and silage while producing more milk.

If you need help with this contact your Teagasc advisor or your local discussion group.

Capital spending

Throughout the year we must ensure we offer the cows enough high quality grazing every day they are milking. To achieve this the farm needs to be walked every week to do a grass cover and then action should be taken based on the grass wedge it generates.

Other actions to be considered this year are putting capital expenditure on hold and squeezing another year out of farm machinery or consider getting a contractor.

Consider reducing the number of replacement heifers being kept as they are very severe on cash flow costing money to rear until they calve and start producing milk. I also attended the Irish Grasslands Association dairy conference in Limerick.

Our discussion group have agreed to submit a completed profit monitor by January 10 and then we will meet with Teagasc on January 20 to discuss the figures. We benchmark ourselves against the top 10pc of dairy farmers with profit monitors completed.

Last year average costs were 23c/l so we will see how we fared out in 2015. We also place a lot of emphasis on output and our preferred measurement is kg of milk solids per hectare on the milking platform.

This day marks our start point for farming in 2016 with a lot of the year's decisions influenced by it.

Henry and Patricia Walsh farm in Oranmore, Co Galway along with their son Enda and neighbour and out-farm owner John Moran

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