How can a dairy farmer earn €90,000/year?
How a farmer getting €750/week from a dairy enterprise, can turn the holding into delivering a family income of €90,000/year, has been plotted by Teagasc in new research work at Moorepark.
It is one way to reverse a situation which are “classic examples of running faster, while at the same time going backwards”.
Senior Research Officer, Laurence Shalloo has drafted the formula to double the return on investment without receiving an increase in the price of milk sold off the farm.
He says “Expansion based on investing in grassland productivity facilitates the generation of significant profits at farm level.
"The returns for investment when there is a focus on increased grassland productivity will be higher than even the most critical of investment hurdle rate criteria,” he says.
In contrast he stressed that “expansion where the process just involves increased bought in feed does not facilitate a good investment”and adds “the expansion process when based on increased grassland productivity increases significantly the overall return on investment”.
A 90-cow herd on a land base of 50 ha, with all replacements reared on the farm, with the grass area producing 10.3t and utilising 7.9 t DM/ha producing a net profit of €39,308 which corresponded to an overall return on investment of 2.7pc. The milk price was set at 29.5c/L.
Six different scenarios were considered in the study with wide variations in the results for income generation.