Irish dairy farmers are facing a difficult year as milk prices have reduced and production costs remain high. This means that farmers need to examine each cow in their herd to ensure that they are profitable. Last year, a good milk price meant that most cows in the herd were profitable, but this year, the margin on milk is not going to be high. As a result, it is crucial to remove any non-profitable or problematic cows from the herd.
The milk price has fallen 16c/L in many co-ops since the beginning of the year. This reduction in milk price, combined with high production costs, has resulted in a decrease in income of €880/cow, based on a 5,500L cow. For farmers milking 100 cows, this equates to a reduction in income of €88,000 if the decrease in prices continues throughout the year. Therefore, dairy farmers need to determine the level of production required within their herd for a cow to be profitable. This level will vary depending on the farm and the system operated. Once this level has been determined, farmers need to evaluate all cows that are below this figure and decide whether or not they should remain in the herd.
Milk-recording data should play a crucial role in this selection process. As the base milk price approaches the cost of production, it is essential that cows do not remain in the herd unless they are making money. Culling cows ahead of the breeding season is common practice on dairy farms. However, due to the high cost of production and low milk prices, it may be more sensible to cull these cows sooner than planned. These cows are usually culled for production issues and are likely to have a low margin or could even be costing more than they are producing. Therefore, it is time to look inside the farmgate for ways to reduce costs and increase margins on milk sold. The simplest way to accomplish this is to remove the cows from the system that are not meeting the required production levels.
In conclusion, Irish dairy farmers are facing a challenging year with reduced milk prices and high production costs. To remain profitable, farmers need to evaluate each cow in their herd and determine the level of production required for profitability. They must then remove any non-profitable or problematic cows from the system. This will help to reduce costs and increase margins on milk sold. By taking these steps, Irish dairy farmers can weather the current economic climate and continue to produce high-quality milk for consumers.