Top dairy farmers earning €2,500/ha
Published 06/01/2016 | 02:30
Ireland's top dairy farmers are making over €1,000/ac, according to data to be revealed at the Irish Grassland Association's conference in Kilkenny this week.
Figures from Teagasc's Dairy Profit Monitors show that the top 10pc of dairy farms returned net margins of over €2,500/ha on average throughout the five year period from 2010 to 2014. While the figure dipped marginally to €2,336 during 2012 when the fodder crisis hit, the average for the subsequent two years was actually €2,782/ac.
While profitability has been hit on dairy farms in 2015 with lower milk prices, excellent grazing conditions and increased volumes have buffered most of the income drop on the best performing farms.
In contrast, the bottom 10pc of farms in the profit monitor returned net margins of just €529/ha during the same five-year period, almost €2,000/ha lower than the best performers.
The differential resulted in a difference in farm income on a 56ha farm of over €100,000, and up to €119,426 in 2013.
The figures are part of a presentation by AIB's agri-advisor, Tadhg Buckley, who will be outlining strategies to manage milk price volatility.
His research shows that since 2007 milk price volatility over any three month period has increased by 300pc. He says that this has resulted not only from the removal of EU dairy subsidies and quota, but is also a function of the inelasticity of food commodities. As a result, modest scarcities cause significant price swings. Increased globalisation of dairy commodity trading is another factor.