Farm Ireland

Saturday 20 January 2018

We cannot afford to have high-cost production systems

Down under: As Irish milk becomes increasingly exposed to global dairy markets, farmers here are looking to New Zealand's dairy industry for benchmarking purposes.
Down under: As Irish milk becomes increasingly exposed to global dairy markets, farmers here are looking to New Zealand's dairy industry for benchmarking purposes.
Joe Barry

Joe Barry

One wonders where it will all end. If the current prices for beef, lamb and corn tell us anything, it is that any farming system that is not losing money is probably only operating on a shoe-string.

Look back 30 years ago when wheat was making £180/t. Now I am told it is fetching closer to €150/t. Convert the pounds to euro and you will see the catastrophic decline that has taken place and then do the same for the price of a fat lamb over a similar period.

It is all very scary stuff but one thing is sure, no one can continue farming at a loss. Either the EU increases the subsidies being paid to farmers to produce below-cost food, as is the current system, or we abandon subsidies altogether and go for the sharp shock that the New Zealanders opted for and seem to have survived.

Dairying is currently flavour of the month but how long will this last?

Demand creates supply and once supply has increased and enough farmers are tied in to higher production levels, then the purchasers could well put the boot in. This is where fancy milking parlours and expensive wintering facilities can become a millstone around a farmer’s neck.

Unless new buildings have been built with, at the very most, minimal borrowings, the repayments can eventually cause any enterprise to fail.

A friend told me of a young man who recently arrived in New Zealand to work for a year and learn their farming methods. What he encountered was amusing to hear about but must have been a severe shock to his system.

He arrived in the middle of their winter, and one of his tasks was to help milk 400 cows, all of which are kept outdoors. Milking is also carried out in the open air and he described the place as a sea of mud with 18 inches of snow to contend with.

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So much for his dream of exciting days spent rounding up herds of cattle in warm sunshine and evenings spent carousing in the company of sun-tanned farmers’ daughters.

Apparently he wasn’t too impressed by the locals either, but perhaps this experience will be the making of him.

My own daughter worked there for two years and she laughed heartily when I told her this sorry tale. She landed at a huge sheep and suckler farm, and once she had settled in she enjoyed every minute of the experience.

She said that Kiwi farmers are a tough lot but they have to be to survive. Her biggest shock was to see sick sheep having their throats cut because it was cheaper than calling the vet or using a bullet.

This is real low-cost farming, without single farm payments or other subsidies, but hard work is rewarded handsomely and with profit sharing, any young person that is prepared to work long hours and learn from others can start without capital and end up wealthy. No wonder they produce so many great rugby players.

Now you might say that outdoor milking is fine for the New Zealanders but a Brit called Rex Paterson that I have written about in the past achieved pretty much the same thing, albeit almost a century ago.

 He started farming in England with virtually no capital in the 1920s and towed a mobile parlour to the cows, commencing milking at 5am. He questioned every penny spent and ended up owning 11,000ac and milking 4,000 cows.

On leaving school, Paterson spent a few years working on a farm in Canada and returned to England, lucky to have enough for the fare home. He then rented a farm in Hampshire and for a few years subsidised his income by catching rabbits.

He practiced meticulous book keeping and recorded and queried every expense, something that we could all learn from, especially when visiting the high cost farm buildings on show at our own demonstration farms and colleges.

George Henderson was another British farmer whose book The Farming Ladder is an extraordinary record of how hard work and low-cost farming can reap its rewards.

It can still be purchased through Amazon or ABE books on the internet for about a tenner. Henderson was another who recorded every expense and continually studied his records to prove or otherwise exactly how well each enterprise was performing.

Having started with just £50, like Rex Paterson, George Henderson ended up a very wealthy man by closely monitoring every expense and practising low-cost farming.

In the process, these men also proved that there is a future in agriculture for determined individuals that know the value of a euro.

Indo Farming