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The Future for Dairy Farming in Ireland is Excellent

Teagasc, Moorepark opened its gates to all dairy farmers’ today, Wednesday, 29 June for an Open Day event to commence planning for EU milk quota abolition in 2015. This major Teagasc Open Day is sponsored by FBD Trust and runs from 10 am to 5 pm.

Irish dairy farming is entering a period of considerable opportunity as the abolition of milk quotas in the EU will allow dairy farming businesses to expand for the first time in 25 years. The export oriented dairy sector has the potential to contribute significantly to Irish economic recovery in the coming years based on an internationally competitive production system and strong world demand for high quality Irish dairy products. The immediate challenge for dairy farmers is to plan for farm business expansion in 2015 within the constraints of milk quotas in the intervening years. The longer term challenge will be to expand the dairy farm business within a market environment where there is little supply chain management, resulting in greater price volatility- albeit around a higher average price.

Teagasc Head of Animal & Grassland Research and Innovation Dr. Pat Dillon said; “Irish dairy farmers are well respected internationally for their low cost efficient milk production systems and ability to rapidly adopt new technologies to sustain that competitive advantage. Any expansion in the dairy farm business should only be undertaken if it increases profitability and provides a better lifestyle to the farm family. In this environment, only those dairy farmers who fully capitalise on the inherent competitive advantages associated with low cost grass-based seasonal milk production systems will be successful.”

Dr Dillon believes that the challenge now for Irish dairy farmers is to further increase the competitiveness of their farming business through the adoption of modern technology in relation to compact calving, higher stocking rates, high EBI replacements, high quality pasture management and low cost labour efficient farm infrastructures. Teagasc profit monitors completed in 2010 show that there is scope for further profitability gains on Irish farms. The 2010 results show that, from a similar overall scale, the top 10% of dairy farmers increased farm profitability by €16,000 after full labour costs were deducted by producing more milk of higher composition with lower concentrate, fertilizer and machinery costs.

Dr Dillon said: “Dairy farmers that plan to expand milk production once milk quotas are abolished, must now invest in areas that will increase farm productivity for the longer term e.g. breeding stock, grazing farm infrastructure and milking facilities.”

The purpose of the Open Day was to prepare dairy farmers for the future by highlighting new research technologies and describing how these modern innovations can be incorporated into the Irish production system to increase overall industry efficiency. Dr Dillon also stressed that “while dairy farmers are taking the lead on industry expansion, a vibrant dairy sector will also require strong leadership from Irelands processing and marketing agencies to step forward and help realise the ambitions of the sector into the future”.