A Northern Ireland perspective
Similar to all farmers throughout Europe, Northern Ireland dairy farmers find themselves in a new era in agriculture. This has been fashioned by EU policy seeking both environmental and rural sustainability. Future farm profitability will be dictated by the market place.
Free market economics always seek to maximise returns against the most limiting resource. Therefore milk producers must make decisions on the system and scale of enterprise mix, taking into account what is limiting efficient production on their own farm.
There are two routes to remain competitive, either produce milk cheaper than others or target quality milk for high value markets. For Northern Ireland the first road is not an option due to lack of industry scale. Therefore quality milk must be delivered competitively to the processor who meets customer expectations with profits shared equitably along the supply chain.
By ensuring they are adhering to ethical production systems, farmers allow consumers to enjoy milk or dairy products and the clean and diverse countryside in which it was produced. This policy is essential and can secure an improved and sustainable return from the market place - but there must be trust and true integration within the supply chain.
Following the introduction of milk quotas in 1984 a limit was placed on potential expansion on the majority of dairy farms. However due to a combination of accessibility, profitability and farmer ability the milk quota held on Northern farms has increased by almost 40 per cent over the past 12 years. This, combined to the additional allocation of 1.5 % of milk quota to the UK as part of the Mid Term Review, has ensured a plentiful supply of quota. Current low purchase and lease prices mean that quotas are unlikely to restrict future expansion.
Other quotas on milk production!
However other limiting factors or "quotas" now exist. Land has always been a constraint on our dairy farms. This is due to its expense, quality, availability and accessibility. Grazeable acres and the logistics of moving cows and machinery on busy roads is encouraging farmers to opt for at least a partially housed system.
The litres sold per hectare can be increased with purchased feed substituting for grazed grass in the cows diet. This may be contrary to the views held by many, where grass is considered the cheapest feed for cows. However this is only true where high yields of quality grass are grown and more importantly utilised.
Several on-farm studies have estimated that only 65 to 70 per cent of the grass grown is utilised by the grazing animal. Recent work by ARINI Hillsborough and CAFRE Greenmount has supported these findings. The data has shown there is little difference in the full economic cost of many of the forages used, with grass costing over £75 per tonne of dry matter (DM).
No feed input is "cheap" and they must all be utilised efficiently for profitable milk production. Plant breeders have put significant effort into enabling forage maize to be grown in a marginal climate. Grass breeding must receive the same focus improving yield, sward density, persistency, drought resistance and ensuring ease of management for better utilisation throughout the growing season.
At the time of writing the detail contained within the Nitrates Directive Action Programme has not been finalised. However current and pending environmental legislation will require some farmers to carefully review their present system of milk production and make appropriate changes.
This Action Programme will limit stocking rates on some farms as a result of total nitrates output per cow and the organic nitrates loading limit per hectare. At an organic nitrate loading of 170kg/ha this is equivalent to a stocking rate of 1.8 to 1.9 CE/ha (CE=Cow Equivalent) or just over two CE/ha if the farm rears its own replacements. If organic nitrates was the only environmental limit, yield per cow could increase through higher feeding to enable total milk sales/farm to grow.
However of particular relevance to Northern Ireland is the role of excess phosphorus in the eutrophication of water. It will be necessary for farmers to be in phosphorus balance in the future. To minimise the environmental impact of phosphorus leaching from the soil the measure introduced may limit the level and type of concentrate fed on farm in conjunction with the use of zero phosphorus compound fertilisers.
Farmers will feed more cerealsAs purchased concentrates are a major source of phosphorus this may place a "quota" on the level of feed and require improved nutritional efficiency of the total diet. Will this change the make-up of diets fed? Yes. Cereals have a low phosphorus content and it is likely farmers will try to harness their potential in future as an alternative forage or as part of a Total Mixed Ration (TMR).
Do dairy farmers have the necessary skills to grow a 10 tonne/ha crop of winter wheat? Will contract growing of cereals or alternative forages be a viable option? Certainly with the present level of interest several dairy farmers are considering these options, allowing them to concentrate on what they know best - managing a herd of high performing cows.
Better breeding for the futureGenetic improvement continues to offer solutions but must be appropriate to the farming system or other problems will arise. Have some farmers paid too much attention to the show ring? Research has clearly shown the link between body condition and fertility. Angularity, height at the shoulder and "dairyness", are these key performance traits for the commercial farmer?
Longevity is essential and encompasses a number of the important traits required, including health e.g. mastitis resistance, lameness, combined with milk yield, compositional quality and a high fertility index - in essence a "happy cow".
Greenmount Dairy Benchmarking
From our Benchmarking results it takes £900 to rear a dairy heifer to the point of calving and a target of 40,000 litres lifetime production is necessary to reduce the depreciation charge against the herd and improve profit. The lifting of the beef export ban allows cull cows to re-enter the beef market. Live exports will also recommence and coupled to the reduction in suckler cow numbers will increase calf and cull cow values. With lower milk price improving the value of all output from the herd will help profitability.
Improving productivity and lifestyle
Quality labour is becoming a scarce resource on large farms and a target of at least 600,000 litres per labour unit has been set. To ensure a quality family lifestyle, time and management skills need to be improved. If the potential of the contractor, nutritionist, consultant, employed labour and farmer can all be harnessed then improvements in productivity can be achieved. If not then labour will be a real quota.
Balancing all these factors at farm level will be key. While it is difficult to generalise for each individual situation, the system, which appears to offer the best opportunity for farm development, is a high output forage-based system. The associated targets are 8,000, 8,500 litres (+1750 gallons) sold per cow per year from less than two tonnes of concentrate at 4.2 per cent butter fat and 3.5 per cent protein with a replacement rate of less than 25 per cent and direct costs of production including family labour of 15 pence per litre (ppl).
However to achieve the results and benefits from such a system will require new innovative thinking coupled to a flexible and adaptable business attitude to the management of the whole farm. A "can-do attitude" with a positive, realistic approach will ensure continued success. It is essential that the milk producer of the future enjoys farming, is rewarded for a quality product and can invest time and money in the business and farm family.
In summary the key components for a successful dairy business are:
• Focus on year on year growth of output and return on capital;
• Concentrate on key areas and harness the skills of others;
• Continually develop business management skills;
• Encourage new thinking onto the farm to challenge "this is the way I have always done it" mentality - farming needs innovation;
• Target top 25 per cent performance from a high output forage system;
• Benchmark to know how you and the farm are performing;
• If you are comfortable in a different business environment invest off farm where a profitable and mature business is current managed - this will provide a new challenge and may encourage the next generation to realise the potential in farming
• Adopt a "can do" attitude, with a positive realistic approach to problem solving; and,
• Enjoy your chosen profession and invest your time wisely.
How to cite this article
McCluggage, Ian (2006).
[On-line]. Available from: http://www.dairyscience.info/index.php/primary-production/116-dairy-farming-in-a-new-environment.html . Accessed: 26 May, 2013.