Viewpoint: Why the figures no longer add up for winter milk producers
Published 02/02/2016 | 02:30
The exodus from winter milk production continues apace.
It's ironic that at a time of massive expansion in dairying, one of the original cornerstones of the industry is contracting in size faster than any others. There was a 16pc fall in dairy calvings during the last three months of 2015. This is almost entirely accounted for by farmers switching to 100pc spring calving systems.
Who can blame them? The most recent figures from Teagasc suggest that it costs almost 3c/l to produce milk year-round. This is the average across the whole year - the actual extra cost of the extra litres produced during the winter months is close to three times that.
Contrast this with the average premium paid to winter milk producers in the last four years - 1.6c/l according to the National Milk Agency.
And that's before any lifestyle considerations are taken into account. Teagasc winter milk specialist, Joe Patton notes how many winter milk operations convert to 100pc spring-calving when the next generation comes home with different lifestyle expectations.
That's why the 3,359 producers that were registered to produce winter milk on contract in 2001 has shrunk to just over 2,000 now, a drop of 40pc.
The processors are probably quite happy to let the smaller winter milk producers fall by the way-side. Over 20pc of remaining suppliers account for just 5pc of the total winter output.
In contrast, the 15pc of suppliers that produce more than 700,000 litres a year account for 40pc of the total. These are the people that the processors really want to keep on-side, because they tend to be professional, and drastically reduce collection costs.