Greenfield research into low-cost, grass-based dairying is compelling
The Greenfield dairy farm in Kilkenny is a most interesting initiative. This project started in 2009 with the aim of converting a 117ha (290ac) tillage farm into an intensive, grass-based dairy unit which would eventually carry 350 cows.
The challenge, under the project's 15-year business plan, is that from a greenfield start this herd will generate an income capable of paying for all running costs. These include labour and land rental (€450/ha), plus repaying a €750,000 bank loan and €350,000 investor start-up capital. Nationally, the project is a blueprint for investing in low-cost milk production in a post-milk-quota era.
Fair dues to Teagasc who undertook to manage and operate the project based on best practice from their dairy research. This was putting their money where their mouth was with full transparency. They had the theory from Moorepark. Now was the chance to implement the theory into a real-life project.
In establishing a unit based on low-cost grass-based farming, Teagasc was tackling the challenges of weather, animal health and the market, any one of which could jeopardise the project. But then again these are the same challenges that confront every family farm.
Last week, Teagasc held an open day on the Greenfield farm. Along with a progress report for the first three years, the event addressed the theme of expansion in dairying.
In terms of achieving public credibility for the Greenfield project and accepting that we learn from mistakes as well as success, it is vital that the Teagasc reportage covers warts and all.
The overall impression from Greenfield is one of competent management. As in most start-up projects there were cost over-runs and some targets are not being met. But equally other targets have been exceeded. Backed by the spike in milk price, 2011 returned a net cash flow of €103,000 versus the €4,400 budgeted on a milk price of 24c/litre. Mindful of the drop in milk prices this season, and the expected volatility of future milk price, the open day speakers urged that some profit be put by into a reserve or 'rainy day' fund. With milk sales of 1.5m litres every 1c/l changes the bottom line by €15,000.
Greenfield has a very clear target. To produce grass as cheaply as possible to be able to survive low milk price and maximise profit per litre when the price lifts. Milk output will be dictated by the volume of grass grown and harvested.