Farm Ireland

Monday 20 November 2017

Focus on dairy masks deep regional disparities

Milk alone cannot transform the fortunes of Irish farming
Milk alone cannot transform the fortunes of Irish farming
Darragh McCullough

Darragh McCullough

Is Ireland placing too big a bet on dairying?

The fact that the number of dairy calf births has increased by 40pc, or over 330,000, since 2010 is a startling statistic.

It highlights just how big a wager Irish farmers have placed on milk being their meal ticket for the next 25 years.

And who can blame them? The numbers in Teagasc's farm viability report that was published yesterday only serve to emphasise the gulf that has emerged between dairying and drystock enterprises.

While 80pc of dairy farmers are considered viable, it is the exact opposite in beef farming where farmers are not able to make enough to sustain a family and continue reinvesting in the farm.

It's not as if the economists who wrote the report were setting the bar particularly high.

They deemed a farm to be viable if it was able to generate an income of €19,167 per labour unit, along with providing a 5pc return on the machinery and livestock.

There is also a huge regional disparity in farm viability.

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In the south and southeast, close to half of farms are generating a viable return. But the corresponding figures in the west and the border areas are just 16pc and 23pc respectively.

The dearth of off-farm work opportunities in these regions is also an issue.

The result is that nearly every second farm in counties such as Cavan, Monaghan, and Donegal is currently lacking economic opportunity either on or off the farm. Nationally, the figure for these so-called 'vulnerable' farms is closer to one in three.

Little wonder then that farmers are betting big on milk as their route to viability.

But the reality is that milk alone cannot transform the fortunes of Irish farming. Currently, there are less than 25,000 viable sheep, cattle and dairy farms. If you added in another 5,000 to account for the remaining sectors, you still end up a long way short of the oft-touted figure of 100,000 farming families.

Not only will dairying not be a realistic option for the majority of farm holdings, it will also be a tough station for the next six months.

Global milk prices are approaching historic lows, and events like last week's stock market crash in China are not going to help the sales of premium Chinese food imports such as infant milk formula and pizza.

These hard facts reinforce the importance of the research that is going into all the other elements of Irish agriculture, not least the beef sector. The work in the likes of Teagasc's beef centre in Grange is still critical to the welfare of thousands of Irish farm families.

Ireland's Food Inc. should never lose sight of that.

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