Increasing production in Ireland – How they aim to do it.

Published 2 August 13

The agricultural industry in Ireland is a significant contributor to the economy, accounting for 10% of all employment and 8% of national exports. The country produces a large surplus; currently, 85% of Irish dairy products are exported, leaving the industry significantly exposed to global fluctuations in dairy commodity prices. For a number of years, there has been a heavy focus on processing with 60% of milk used in powders or butter processing, a third used for cheese production and the remainder consumed as liquid milk domestically.

A large proportion of Irish exports are as infant formula with growing markets in Africa and Asia. Researchers at Moorepark have estimated that worldwide, approximately 20% of babies consume an Irish-produced formula.

It’s expected that in the near future, developing countries will increase their consumption of dairy by 2% per annum. That is why the Irish dairy industry is aiming to further increase production of milk solids for processing from 5.5 million to 7.5 million tonnes milk solids per annum following the abolition of quotas in 2015.

Key facts: Irish Dairy Industry

  • National herd = 1.1 million cows (90% spring calving)
  • 18,000 suppliers
  • 24 co-ops/PLCs
  • 5.5 million tonnes milk solids produced annually
  • Average farm size = 32 hectares

Padraig French, Head of Livestock Research at Moorepark, says that although New Zealand is historically seen as the main competitor for Irish produce on the global market, the USA is becoming increasingly influential.

“Large scale dairying systems on the west coast of USA are responding rapidly to fluctuations in market prices for milk and feed; they increase production and reduce culling rates when prices are high and feed is good value, and lower production and increase culling when milk prices are low and feed is comparatively expensive,” says Padraig.

Despite increasing volatility in the global dairy markets in recent years, Ireland aims to develop an industry which is resilient to large fluctuations in global dairy commodity prices. Industry leaders feel an industry based on grass utilisation and spring block calving – similar to New Zealand – will be best placed to respond to this.

Meeting the targets 

Within the structure of the industry, there are four key areas they are targeting to help meet the goals set out in Food Harvest 2020:

  1. Cow numbers – A 3% increase in dairy cow numbers each year
  2. Stocking rate – A modest increase in the stocking rate from 1.9 to 2.1 cows per ha to increase milk production by over 10%
  3. Milk production per cow – 2% increase in milk yield per cow per annum
  4. Land area – An increase in the amount of the grassland area used for dairy farming – currently 20%

However, before the industry decides to expand, farmers are being advised to look at their current business and identify areas where there is scope for improved efficiency; this has been called ‘Skill before Scale’.

To do this, the Irish agriculture and food development authority Teagasc has set a number of farm target key performance indicators (see table 1). Significant emphasis is being placed on both ‘front loading’ the calving period to have 90% of cows calving within the first 6 weeks of the grazing period, and reducing feeding costs, targeting 0.5t concentrates/cow/ year with silage only fed in severe grass deficits.

Table 1: Key performance indicators of resilient farming systems compared with current average and top 10 per cent farm performance (Roche and Horan, 2013)

 

Current farm average

Current top 10% of farms

Target

Pasture growth (t DM/ha)

6 – 14

10 – 16

12 – 20

Cow live weight (kg)

550 – 600

550 – 600

500 – 550

Herd EBI (€)

100

140

250

Comparative stocking rate (kg LW/t feed DM)

95

90

75 – 85

Concentrates fed/cow (kg DM)

800

700

500

Milk solids yield/cow (kg)

350

403

450

 

 

 

 

Six week herd calving rate (%)

55

70

90

Nitrogen use efficiency (%)

25

-

40

Cows/labour unit (No./LU)

50 - 80

80 – 100

100 – 150

 

 

 

 

Proportional retained earnings (%)

30 – 50

40 – 60

50 – 70

Total milk production costs    (€/kg MS)

3.75

3.10

2.90

                                                          (c/l)

(30)

(24)

(23)

Profit/cow (€)

0

660

750

 

Breeding strategy will also play a major part in improving farm profitability. The aim is to produce a very robust cow that can:

  • Produce 400 – 450 kg milk solids/yr
  • Calve every 365 days
  • Calve down at 2 years old
  • Have a liveweight of 500 – 550 kg
  • Is resilient to variable weather.

Outlook

Speaking to farmers within the industry, there is a level of optimism. Processors are mainly farmer-owned co-operatives, and they are looking at a model to make the whole supply chain profitable and invest in more processing capacity over the next few years.

The last five years has also seen an influx of well-trained young people into the industry; an estimated extra 25,000 workers will be required in the sector to meet the 2020 targets. Farmers believe that the grass-based system is sustainable and competitive, and will look to make the most of their opportunities post 2015.