March 21, 2012

UK beef farmers shift to dairy industry

A new Teagasc/Department of Agriculture survey has found that about 60% of Ireland's newest dairy farmers have switched from beef.

The next generation of dairy farmer is highly educated, with 93% of entrants to the industry holding at least two years of formal agricultural education.

Aiming to milk 70 cows on average, they expect to make an average profit of EUR0.05 (US$0.07) per litre or EUR422 (US$560) per hectare for their milk.

The young farmers' ambitious plans were revealed in research from Moorepark-based Teagasc Walsh Fellow Roberta McDonald.

McDonald analysed the five-year business plans submitted to the Department of Agriculture by 230 farmers who applied for the 200,000l quota allocation New Entrant Dairy Scheme.

The average age of the new farmers who applied for quota from 2009-11 was 36, and 81% of them were from the southern half of the country. The farmers planned to farm 58 hectares on average, stocked at 1.74 livestock units per hectare.
 

The young farmers were resigned to borrowing heavily, projecting average loans of EUR88,000 (US$117,000) over five years.

However, it appears that some of the applicants may have under-estimated the cost of setting up a dairy farm from scratch. The average borrowing expectations were for around EUR2,500 (US$3,300) per cow, while Teagasc estimates are closer to EUR3,500 (US$4,600) per cow.

Meanwhile, with the end of the quota year rapidly approaching, IFA has called on the Department of Agriculture to review the Milk Quota Appeals Tribunal procedures to take account of farmers whose herds have been restricted due to disease.

IFA dairy chairman Kevin Kiersey said some farmers who were locked up for long periods faced potentially sizeable super levy fines.