Switzerland has a unique structure in its dairy industry due to state supports. So I was delighted when I got the opportunity to see it firsthand recently.
Their dairy industry was protected from competition by imports up to 10 years ago. At that time, dairy farmers got 90 cent per litre (cpl). Current milk price is closer to 47cpl. However, government supports account for approximately 50pc of dairy farm income.
The Swiss government has placed emphasis on self-sufficiency in milk products to avoid rural depopulation by keeping small farms viable.
A significant feature encountered was the size of dairy herds. Over 80pc of dairy herds range from 10 to 50 cows in size, despite the fact that there are no milk quotas. Herd size has increased over the past 10 years however.
Family-run farms are the norm, and the use of technology is increasing all the time to accommodate the management of cow numbers.
There has been a significant uptake in robotic milking systems in herds above 50 cows. Farmers claim a better lifestyle with robotic milking. The Brown Swiss is the predominant dairy breed, with some Holstein, Jersey and cross-breeding from the same.
The dairy herds visited had 305-day rolling herd averages ranging from 7,200 to 9,000 litres. Calving patterns were year round affairs with a peak in the autumn. A technician-led AI service through Swiss Genetics was the primary method of getting cows in calf.
The winters are long and harsh with cows housed from October to May. Often the cows are housed in tie-up stall systems. The system is labour intensive. On one herd of 38 cows, a husband and wife team work full-time on the farm.
Needless to say, this type of an operation would not survive except for the government subsidies. But the subsidy structure helps keep farming families in rural areas, which in turn maintains a rural social fabric integral to their tourist industry.
In Ireland, we have placed an emphasis on a 50pc increase in milk production by 2020. What will this do to small dairy farms based on fragmented holdings? A classical example is the dairy industry on the Dingle peninsula in Co Kerry.
Many of these dairy farms range from 25 to 60 cows in size. The opportunity and desire to increase herd size is restricted. Farm fragmentation, size and age structure of the farming population leave little opportunity to expand. Indeed, the wet summer of 2012 will force many farmers to reduce rather than increase cow numbers.
Back in Switzerland, I got the opportunity to visit a milk processing plant owned by Christof and Markus Züger. They employ 180 people, process 10,500 tonnes of milk into a range of 500 food products.
The emphasis is on added value products such as mozzarella, feta cheese, mascarpone, grill cheese and lactose free milk products. They source all their milk from Swiss dairy farms, including milk from conventional, organic and buffalo dairy herds.
They won the Ernst & Young Entrepreneur of the Year Award 2010 for their level of innovation. The Irish dairy processing industry has placed too much emphasis on commodity based milk products that, in my opinion, will decimate the dairy industry on small fragmented farms in rural Ireland after 2015.
We need more than the Kerrygold brand of butter which has triumphed across Europe. We have a green image but we need a Züger milk processing mentality to add value to milk products for niche markets.
Finally, the Züger plant works in an environment where there are no milk quotas. They agree milk price contracts directly with farmers.
Milk price is lowest in spring months because of supply and demand curve.
The price increases from May to August as close to 8pc of the dairy herd is moved to the mountains to produce Alpine cheese. This is another initiative by the Swiss government to maintain cottage industries.
They have funded the establishment of a processing plant for the hand-made production of Alpine cheese. Farmers currently get €20/kg for this cheese.
There is a spin-off to the tourist industry as the tourists are drawn to a vibrant active community in the mountainous areas during the summer months. Can we learn from the Swiss government intervention before my farming friends on the Dingle peninsula disappear?
Dr Dan Ryan is a bovine reproductive physiologist and can be contacted at www.cowsdna.com