New Zealand Expert Predicts Bright Future for Irish Dairy Farmers
15 November 2006
There is a bright future in dairy farming in Ireland for those who want it. That was the simple message from Dr John Penno, Chief Executive of Synlait Limited, Canterbury, New Zealand. He is in Ireland, this week, to address the Teagasc National Dairy Conferences in Limerick today, Wednesday 15th November and in Cavan tomorrow, Thursday 16th November, 2006.
Located on the doorstep of the European market he argues that deregulation of European milk policy would offer a huge opportunity for Ireland’s dairy farmers.
He said: “All we know is that it will be very different from now – if you want to be part of it, you are going to need to learn to change fast – farmers need to think less about what is happening outside the farm gate and exercise more control over our farming businesses. Production of milk will not decrease, it will simply be produced by fewer, larger highly successful businesses.”
Dr Penno pointed out that over the last 15 years the dairy farmers in New Zealand have doubled the amount of milk they produce and export to the world.
He said, “The success of dairying in New Zealand has not been based on our processing and marketing structure – it is based on the ability of farmers to innovate and of innovative farmers to continually control more of the farming assets.”
The progressive upper quartile of dairy farmers in New Zealand are increasing productivity at a much greater rate than the average of two per cent per annum, as they improve performance on their existing farms and buy under performing farms. It is not uncommon for farms to change hands and increase production by 25-50 per cent the first season under new ownership.
Synlait, the Canterbury dairying business, of which Dr John Penno is Chief Executive, started in 2000, and is now dairy farming approximately 3,000 ha of irrigated land, producing some 50 million litres of milk from almost 10,000 cows, and expects to receive around €0.17 per litre of milk.
His recommendations for a successful dairy farming business include focusing on profit – EBIT/ha, by benchmarking the physical and financial performance of each farm against others in the business and against industry statistics each year.
