Plan for Survival: Teagasc Advises Dairy Farmers

IRELAND - Dairy farmers are facing a dramatic decline in milk price in 2009, and ‘cut spending’ is the message from Teagasc dairy experts to milk producers with a high cost structure.
calendar icon 16 February 2009
clock icon 2 minute read

This spring, the projected milk price could equal or exceed milk production costs on many farms. Teagasc advice is to develop a financial plan now that establishes gross output, determines the income required by the farm family to live for the year and ascertains debt repayments. The remaining balance is what is available to meet milk production costs in the current year.

“Our research programme at Moorepark is focused on developing low cost robust milk production systems”, according to Padraig French, Teagasc dairy researcher, Moorepark. “This is not the year to worry about filling quota, fill it only if it pays to do so. For some producers their cost structure is such that it may not be economic to fill quota. Postpone all non-essential costs this season and examine every cost ruthlessly. Prepare a financial budget and stick to it”, he concluded.

“Cut spending - some production costs, particularly variable costs, can be reduced quickly while others will take longer to decrease. Feed, fertilizer and contractor costs account for almost three-quarters of the total variable costs on the typical farm”, said George Ramsbottom, Teagasc dairy specialist. He said: “Put milking cows to grass immediately and reduce or eliminate concentrates. In difficult grazing conditions, three-hour on–off grazing can be used. All the protein the herd needs is in the grass. Grass increases milk protein percentage, increasing milk value by up to 3 cent per litre while reducing feed costs. Less silage is required and in turn contractor costs are lowered.”

He continued: “Only apply enough Nitrogen to match your stocking rate. Teagasc recommends that only 28 kilos of Nitrogen per hectare are applied in February with a maximum of 49 kilos per hectare applied in mid-March at 2.5 cows per hectare. Research shows that you can substitute fertilizer N with light dressings of slurry on half of the grazing area this spring, further reducing fertilizer costs. Contact Teagasc for fertilizer recommendations targeted to match your own stocking rate.”

Changes in EU milk price support mechanisms and a global decline in demand for dairy produce, which is being exacerbated by the worldwide credit crunch, are blamed for this unprecedented decline. Increased price volatility is now a fact of life in the agricultural sector.

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