Can Ireland learn lessons from the 'unprofitable' Welsh dairy sector?
While we may have recently edged past Wales on the rugby pitch, Irish dairy farmers should take heed of a new survey which shows that three-quarters of dairy farms in Wales are currently unprofitable.
The new report issued by the Agriculture and Horticulture Development Board (AHDB) highlights that the average farm was making a loss of 14 pence per litre and that the average cost for a litre of milk was 28 pence per litre but when subsidies were removed this meant the cost of production was higher than income received for the milk.
While the Teagasc Outlook report told Irish agriculture stakeholders in December that the average income per dairy farmer in Ireland was €90,000 for 2017, it highlighted that a weakening in Irish farm milk prices in the region of 10pc was likely to take place as global milk supply growth begins to outpace milk demand growth in 2018.
The Welsh report also showed that most farmers were in their 60s, closely followed by the next group consisting of farmers in their 50s. This is not dissimilar to Irish agriculture where the average age of the overall farmer is 57 years of age.
Three-quarters of those wishing to exit dairy farming in Wales are small farms with fewer than 150 cows. This is a considerably larger average herd size than four years ago when 80 per cent of those wishing to exit had fewer than 100 cows.
The survey concluded that profitability in the Welsh dairy sector was on average lower than in England and added that “it is concerning how few farms were making any money from their farming business, and were presumably dependent on their subsidy payments”
While volatility and vulnerability could be on the cards for Ireland as a result of Brexit, Wales will too feel the effects of the UK’s exit from the European Union, however Rural Affairs secretary for Wales, Lesley Griffiths believes Brexit offers opportunities as well as challenges for the region.
“Brexit presents significant challenges to the agriculture industry but also opportunities. The industry and individual farmers must start to plan now for the future," she said.