Expansion costs work out at €4,000 per cow or 4c/l of milk production
I visited a Meath dairy farmer recently to see first-hand the challenge that is involved in expansion, and the true extent of the costs involved.
The 130 winter-milk cow herd has increased to 200 cows over the last three years. No land was bought, but an additional 137ac of land was leased on a long-term lease. Leasing costs come in around €290/ac.
The farm is a no-frills operation, with costs at 23c/l plus 3c/l for depreciation. However, the price of expansion shoves another 4c/l on to the overall cost. Here's how the items added up.
While the land is good farmland, it needed liming, reseeding and some drainage work to maximise its grass production. This came to €60,000, before fencing, water-troughs or roadways were included.
About €15,000 was spent on roadways, while fencing cost another €16,000. Water-troughs and piping came to €10,000.
Water itself was one of the biggest expenses encountered during the whole process. Only two years ago a 420ft well was drilled to access more water after the farm's original 120ft well dried up during the previous 2011-2012 season. Drilling and lining the new well cost €11,000, and because the water has so much iron in the area, the €500 pump had to be replaced every three to four months.
However, despite having a water requirement of 1,000 gallons per hour to maintain the 200 cow herd, the new well is only providing a maximum flow of 270 gallons per hour.
As a result, the farmer has now resorted to extracting water from a local river to top-up his supplies.