14 April 2000

Change is needed to entice young

There were a number of

firsts at this years Irish

Grassland Conference. It

was the first time that

Northern and southern Irish

grassland societies had

shared the conference and it

was the first time that a

European Commissioner

addressed delegates.

James Garner reports

DAIRY farming needs to be both profitable and enjoyable to attract the young entrepreneurs the industry needs, says Sinclair Mayne, head of dairy research at the Agricultural Research Institute of Northern Ireland at Hillsborough, Co Down.

He said average herds of 55 cows in Northern Ireland were confronted by losses of £20,000 a unit because of BSE and the strong £, and that farm profits had plummeted to just £4000 on an average family farm. Of great concern, was that little had been done to address this change, he said. "There has been little alteration of fixed costs on these farms. They remain at £30,000 a unit or 52% of total farm output."

Tackling fixed costs rather than producing extra milk output would be the best solution for many dairy farms, said Dr Mayne. Illustrating his point, he said reducing the cost of producing a litre of milk by 2p for a 500,000-litre herd would result in a £10,000 cost saving and would increase farm income.

In comparison, boosting output by 100,000 litres of milk would give a high cost producer an extra £4000 return and a low cost producer an extra £6000 income.

"This assumes there is no change in fixed costs for producing extra output. Few farms could increase output by 20% and not add to overhead costs." For those farms losing money now, he warned that increasing output would only serve to quicken their demise.

According to Dr Mayne, the best solution was to tackle fixed costs and then attempt to bolster output when price demanded. He admitted it was easy for him to say that as a researcher, but there were lessons from around the world that show it could be done.

Two areas of potential improvement are increased use of grazing and greater focus on reducing labour for each unit of output. But he cautioned against a mass switch to low yielding systems that relied totally on grazing.

"This may not suit every system. If you have money invested in buildings and machinery then you may have to sustain outputs because it may be difficult to cut fixed costs swiftly," he said.

"In these situations reducing fixed costs may be a gradual process and so sudden transition to low yields may not be the right route," he added.

DAIRYFUTURE

&#8226 Family farm losses.

&#8226 Business restructuring?

&#8226 Tackle overhead costs.

Dairying must be enjoyable and profitable to attract young people.