Our Organisation Search
Quick Links
Toggle: Topics

Teagasc National Farm Survey 2020 Dairy Enterprise Factsheet


The 2020 Teagasc National Farm Survey (NFS) recorded data on 836 farms representative of over 93,000 dairy, beef, sheep and tillage farms nationally. This analysis summarises the results of dairy enterprises, excluding farms supplying mostly liquid milk and herds of 10 cows or less.

Download the factsheet as a PDF: Dairy Enterprise Factsheet

The graphic below gives an overview of the average performance in 2020.

1. Analysis of Financial Performance

Data from the Teagasc NFS indicates that the average milk price increased marginally (1%) in 2020 resulting in a 2% rise in gross output per litre. In addition, due to a general decline in input prices and relatively stable usage, there was a 2% decrease in total direct costs for the average dairy enterprise. This is reflected in, amongst other things, the 4% average decline in concentrate feed costs and 5% reduction in pasture and forage. There was also a marked decline in total fixed costs, which were on average, down 5% compared to 2019. This was primarily due to reduced depreciation costs (14%) for both machinery and buildings, and lower expenditure on energy and fuel. There was some variation in other fixed costs but overall the direction was downwards. On average, total production costs decreased by 3%, to approximately 24.31 cent per litre of milk. Margin figures reported include hired labour costs, but the methodology does not treat farm family labour as a cost (see Box 1). Decoupled payments are also excluded.

Table 1: Average gross margin and average net margin 2019 and 2020


Source: Teagasc National Farm Survey 2020

Production conditions in 2020 were generally benign and total milk production nationally continued to grow.  However, due to an increase in the land area dedicated to dairy production, there was a 2 % decline in milk produced per hectare compared to 2019.  In general, the production cost savings detailed above, led to a reduction in total costs per hectare of 4% resulting in the average dairy enterprise net margin, increasing by 9%, on a per hectare basis, in 2020.

Table 2: Average net margin 2019 and 2020: Dairy Farms


Source: Teagasc National Farm Survey 2020

*Milk Produced includes milk fed to calves as well as milk delivered to dairies

2. Variation in Financial Performance

Beyond the average, it is useful to also explore the performance of the better and less well performing cohorts. Splitting the population into three groups on the basis of gross margin per hectare, Table 3 shows dairy enterprise results for the best performing one-third (Top), the middle third (Middle) and bottom third (Bottom).  A wide variation across some cost components continues to be observed, with input expenditure typically higher for the bottom cohort.  Similarly, a comparatively lower gross output on average, results in a reduced net margin overall.

Table 3: Output, costs and net margin Top, Middle and Bottom thirds 2020: Dairy Farm

Source: Teagasc National Farm Survey 2020

Relative to 2019, concentrate feed expenditure decreased in 2020 for all three cohorts, remaining highest for the bottom group, for whom pasture and forage costs were also highest.  Costs relating to hired labour were highest for the top group, higher output farms.   A wide variation in net margin is reported across the three groups varying from 14.02 cent per litre on top performing farms to 8.63 cent per litre for the bottom group.  Relative to 2019, this reflected an increase of 1.48 cent per litre, on average.  Across groupings, this represented an increase of 0.58 cent per litre for the top group with more substantial increases for the middle (1.87 cent) and bottom groups (1.99 cent).

Table 4 presents the variation in output and gross margin per hectare for the Top, Middle and Bottom groups in 2020.  Gross margin per hectare declined slightly for the top cohort (down €17) with increases for the middle and bottom groups (€91 and €62 respectively).  In 2020 the gap between the top and bottom groups in terms of gross margin was just over €2,041 per hectare, a slight reduction on the previous year.

Table 4: Output and profit for Top, Middle and Bottom one-thirds 2020: Dairy Farms


Source: Teagasc National Farm Survey 2020

3. Variation in Technical Performance

Table 5 presents a selection of technical performance indicators for dairy farms in 2020. Generally good production conditions resulted in an improvement in these metrics year-on-year. Milk production per cow remained relatively unchanged in 2020. An improvement in milk solids per cow is evident (+2%), and there was also a decrease in somatic cell count (down 4%), both indicators consistently performing well in recent years. Concentrate feed use fell marginally in 2020, and was on a par with levels prior to 2018 where usage increased substantially due to difficult weather. Overall, grazing days in 2020 were typically in line with the previous year.

Table 5: Technical Performance Indicators 2019 and 2020: Dairy Farms

 

Source: Teagasc National Farm Survey 2020

Table 6 shows Teagasc Dairying Road Map Targets for 2025 and the percentage of dairy farms achieving each of these performance indicators in 2020.  These figures are reflective of improvements across all metrics compared to 2019, with the exception of milk yield and concentrates per cow which remained unchanged.

Table 6: Percentage of farms reaching Teagasc 2020 & 2025 Dairying Road Map Targets in 2020

Source: Teagasc National Farm Survey 2020

There has been a steady increase in average herd size in preparation for and in the aftermath of milk quota abolition.  In 2020, the average herd size was 84 cows, a 28% increase compared to 2014. 

In 2020, smaller herds, with less than 40 cows, accounted for 15% and 5% of the total milk pool.  On the other hand, more than a quarter of herds comprised at least 100 cows, accounting for more than half of total milk production in 2020.

Table 7: Herd Size distribution 2020


Source: Teagasc National Farm Survey 2020

The increase in dairy farm scale, represented by farms with at least 100 cows since 2010 is reflected in Figure 1.  The data indicates that this cohort has more than doubled over the period, from 13% in 2010 to 27% in 2020.  

Figure 1: Structural change in Irish Dairy Farm Size 2010-2020

Source: Teagasc National Farm Survey 2020

View the Situation and Outlook for Irish Agriculture (July 2021) here 

For further information on this publication or other Teagasc National Farm Survey Publications please contact NFS@teagasc.ie