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Economic and environmental performance of Irish dairy herds - what are the measures of success?

Economic and environmental performance of Irish dairy herds - what are the measures of success?

As with all industries and sectors of society, agriculture is being increasingly challenged to play its part in improving climate and environmental sustainability. Joe Patton, looks at the economic & environmental performance on Irish dairy herds as part of the Teagasc Virtual Dairy Conference 2021


  • Optimal stocking rate should be decided based on grass growth potential of the farm and not cows per unit area, in order to avoid drift into higher cost systems with greater environmental risks
  • Nitrogen use efficiency can be increased through implementation of proven technologies such clover and low emission slurry spreading, lessening the reliance on chemical fertilizer N
  • Breeding robust cows with good fertility and calving heifers at 24 months, improve lifetime milk performance of the herd and reduce the carbon intensity of milk production.


The Irish dairy industry has changed significantly in terms of its output and efficiency over the last 10 years, delivering an increase of over 70% in milk output from a 43% increase in dairy cow numbers in 2020 relative to 2007-2010. This growth and technological progress has added approximately €3bn to the value of food exports from the country and sustains around 60,000 careers across the economy. Despite some concern and commentary regarding the ‘industrialization’ of dairy farms, the supplier base in Ireland has largely retained its family farm profile during the period. The average farm is now milking 82 cows at a stocking rate of 2.1 livestock units per ha (Teagasc National Farm Survey, 2020), with a spring-calving, pasture-fed model predominating.  

As with all industries and sectors of society, agriculture is being increasingly challenged to play its part in improving climate and environmental sustainability. Issues such as greenhouse gas (GHG) and ammonia emissions, water quality, and biodiversity are now foremost in the minds of government and private citizens. There is legitimate concern among many dairy farmers as to the implications for economic sustainability of potential changes to their production system. Nonetheless, there are a range of practices and technologies that can improve economic and environmental outcomes in tandem. This short paper summarizes some concepts and examples in this regard.  

Optimising stocking rate and pasture utilised

Stocking rate is generally defined and understood as livestock per unit area, e.g. cows per hectare. It is an important driver of the overall system due to its effect on sward utilisation, feed budget inputs, milk yield per cow and farm infrastructure requirements. Stocking rate as a stand-alone measure has a positive effect on profit per ha and accounts for 25-30% of the variation between farms (based on eProfit Monitor data). However an obvious limitation is that it takes no account of feed supply per ha; this is dictated by annual pasture growth which can vary from 9-15 tonnes of DM per ha across proximate farms within a given year (PastureBase). Assuming that a dairy cow requires 5.5 tonnes of DM per ha pasture grown to meet forage demand, the true stock carrying capacity of a farm may range from 1.6-2.7 Lu per ha depending on annual pasture growth rate.

Optimal stocking rate cannot therefore be defined in the absence of reliable annual grass production data. Grass utilised on the other hand incorporates purchased feeds, stocking rate, and herd nutrient demand per cow, to calculate a figure for forage utilised per ha. The current industry average is eight tonnes of DM grass utilised per ha with a research target of 12 tonnes of DM per ha. The grass utilised metric explains 55-60% of the herd-to-herd variation in profit, so farms with more grass utilised per ha can be reliably expected to have higher profit margins (milk yield per cow explains less than 10% of farm profit variation in comparison). Importantly, when grass utilised and stocking rate are analysed together, the stocking rate relationship to profit tends to become negative. This indicates that while stocking rate as a metric is linked to farm profit, it is through its effect on grass utilised that the effect is realised, and that increasing stocking rate beyond the point at which grass utilised is maximized may result in lower profit per ha.

How then does stocking rate interact with economic and environmental sustainability? The annual cost of purchased forage and concentrate to sustain stocking rates beyond grass growth capacity of the farm is estimated at €1100-1300 per cow at 2020 input costs, depending on farm circumstances. Overheads, accommodation and other capital costs must also be accounted for, therefore it is vital that farms complete a cost budget relative to herd milk solids output before adding marginal cows to a system. In terms of environmental impact, previous life-cycle analysis of the carbon intensity of the dairy system has shown that a system based on grazed pasture can achieve lower CO2 output per kg of saleable product that systems reliant on conserved forages and imported concentrate sources. The current estimate for an optimized grass based system in Ireland is 0.86kg CO2 per kg of milk, with potential for a reduction to under than 0.75kg CO2 per kg of milk with the implementation of new technologies. Furthermore, a key measure of abatement of ammonia emissions is maximizing days at grass to reduce losses associated with slurry handling. Maintaining a focus on grass utilized, and avoiding a gradual drift into more intensive hybrid indoor/grazing systems, is an important objective that can deliver economic as well as environmental benefits. It is well understood at research and advisory level that issues of scale and fragmentation must be accounted for at farm level, therefore careful case-by-case analysis should be conducted around optimal stocking rate for individual farms. 

Targeting nitrogen use efficiency

EU policy is targeting a significant reduction in chemical fertilizer N application rates in the coming years. The potential environmental benefits include reduced risk on N leaching to water, lower ammonia emissions, and a reduction in the GHG levels associated with fertilizer manufacture and losses post-application. However, N remains a critical nutrient in the production of forage quality and quantity for dairy production systems. A potential risk at a farm level is reduced DM production, leading to forage shortages and an increase in the level of supplementary feed required. Therefore, improvements in the efficiency of N use, and maximising the contribution of N fixed from legume swards, will be key targets. An important metric in this case is N use efficiency, calculated as the proportion of N imported onto the farm that is transferred to saleable product. Current estimates put average N use efficiency at 25% on dairy farms, with a potential to increase this to 35% and above. The steps to be taken to achieve this also present opportunities for improving economic efficiency. 

The potential of white clover swards to transform N use efficiency is the principal avenue to improve N use efficiency while maintain animal performance. It is discussed in detail elsewhere in this booklet. Similarly, low emissions slurry spreading (LESS) is a well proven means of maximising the recovery of nutrients from slurry while reducing losses to the environment. This is essential cost-saving technology in the context of higher fertilizer prices. It also improves the flexibility of grazing management at key times of the year. The level of uptake of this practice on dairy farms is very encouraging and the benefits are clear.

Dairy concentrate rations have traditionally been traded on the assumption that crude protein (CP) content is the primary measure of feed value. However, on typical ryegrass or ryegrass/clover swards, crude protein is rarely limiting for milk production (the exception being in extreme drought conditions). A reduction of 2% in ration CP can reduce ration costs by around €8 per tonne while improving N efficiency and maintaining milk solids performance at grass.

Improving herd fertility and longevity

Better herd fertility increases annual milk yield relative to genetic potential, by maximizing days at peak lactation and increasing the proportion of more productive mature animals in the herd. It also leads to lower involuntary culling and replacement heifer inventory costs. Herds with better fertility have more control over median calving date and therefore can achieve closer alignment of feed demand and pasture supply across the year. These factors are beneficial from a profitability and carbon intensity perspective alike.

Within the national herd, there has been steady progress in the key fertility metrics of 6-week calving rate and calving interval over the last 8-10 years (Table 1), reversing the dis-improvement that had occurred over the previous two decades. The inclusion of fertility/longevity traits in the EBI and better reproductive management practices have contributed strongly to the trend. This has been verified in results from the Next Generation Herd and numerous analyses of farm data. There remains however ample scope for gains on average 6-week calving rate within the sector. Dairy farmers should continue to focus on breeding for fertility traits using EBI, and benchmarking annual herd performance against industry targets.

Age at first calving can be a very important factor in determining carbon intensity of milk production – calving at an older age generates additional C02 from a mature animal for zero additional saleable product. Older heifers will also contribute to higher organic N loads on a whole-farm basis. A similar effect occurs with older age at slaughter for beef animals. There is little or no evidence in the literature to indicate that delaying age at first calving confers any benefit on animal productivity or longevity; in fact, the opposite is the case. 

Summary and practical implications

On a positive note, ICBF animal-level data shows that the proportion of heifers calving at two years old is improving steadily since 2012, with up to 74% now calving at 24 months of age. Further examination of this trend shows that the distribution of mean calving age is polarized between herds. In other words, herds tend to have either a high proportion (>90%) or a very low proportion of heifers calving at target age. These data indicate that herd-level practices are the primary determinant of variation in age at first calving. Furthermore, recent survey work conducted by Teagasc showed that fewer than 5% of farms who regularly weighed replacement heifers were failing to meet age-at-calving targets. A specific cohort of farms can therefore make economic and environmental gains by addressing young-stock management protocols.

The issues faced by dairy farmers to maintain family farm income while meeting environmental targets are numerous. However, it should be recognized that the industry has achieved much in the last decade, not by growth alone but by continuous investment in technological improvement. The system of milk production practiced in Ireland compares very well internationally in terms of carbon intensity, and further progress is possible. Much can be achieved by optimizing stocking rate and feed system, and improving herd fertility and genetics. Altering fertilizer N type and rate will contribute much also.  The development of methane abatement feed technologies has great potential but requires tailoring for grass based systems; this work continues in Teagasc and elsewhere. As regards N use efficiency, implementation of proven technologies such as LESS, soil fertility management, grass measurement and of course clover swards, offer excellent options. Uptake and implementation of these practices is not simple by any means, but the economic and environmental benefits are clear. The long tradition of dairy farmers meeting challenges by implementing new practices and technologies looks set to continue.

This article was produced as part of the two-day Virtual Dairy Conference 2021 which took place on 23 and 24 November.

The complete Dairy Conference Proceedings can be viewed here and the individual articles will be published on Teagasc Daily throughout the week.