Dairy: Milk profit margin returns to 2014 level
The average dairy farm is likely to have an family farm income of € 75,000 to €80,000 in 2017, according to the annual Situation and Outlook report by the Agricultural Economics & Farm Surveys Department in Teagasc.
Family Farm Income represents the return from farming for the farm family to their labour, land and capital.
It does not include non-farm income.
Higher levels of milk production will boost the growth in farm incomes in 2017.
The current forecast is that the average sized Irish dairy farm could see a net profit margin increase of close to 100%, in 2017, rising to about 13 cent per litre.
On a per hectare basis, the predicted average net profit margin of nearly €1,500 compares with €1,400 in 2014, €1,000 in 2015, and €800 in 2016.
Irish milk prices were as low as 24 cent per litre in June 2016, but had recovered to over 33 cent per litre by June 2017. Short term prospects for dairy commodity prices are for stability rather than further increases, given that the higher prices of recent months are fuelling a recovery in production growth.
In contrast to weak growth in milk production globally, milk production in Ireland continues to grow at pace, driven largely by continuing increases in dairy cow numbers.
The Irish dairy herd is likely to be about 3% larger at the mid-point of 2017 relative to the same point in 2016.
Production for 2017 is likely to be up by 6% or more on the 2016 level (depending largely on grass growing conditions between now and the end of the season).
The improving monthly milk price may spur a stronger increase in milk deliveries.
On the inputs side, available data for the first half of 2017 shows a slight drop in Irish feed prices compared to 2016, bringing feed prices to their lowest level since 2011.
The volume of Irish dairy feed sales has been running ahead of 2016, but this can be explained by the increase in cow numbers, with little change in feed per head.
Overall, dairy production costs for 2017 appear to be little changed from 2016, and the outlook for the rest of 2017 suggests that no cost inflation is likely.
Fertiliser prices trended downward through 2016 and are set to remain low through 2017.
Fuel expenditure also declined on dairy farms, reflecting the sharp fall in oil prices.
There has been a slight rebound in fertiliser and fuel prices, but this is from a comparatively low base.
Interestingly, data from October 2016 to March 2017 shows a 31% increase by Irish farmers in nitrogen fertiliser sales, and a 26% increase in phosphorous and potassium sales, relative to the same period in 2015/16.
The increased sales may indicate forward purchasing of fertiliser by farmers attempting to maximise the benefit of lower fertiliser prices, rather than an overall trend towards increased fertiliser usage.
Teagasc/FRS best practice in milking training course
Teagasc and FRS Training Ltd offer a Best Practice in Milking Training Course.
This two-day course (on non-consecutive days) commences today at FRS Roscrea, Derryvale, Roscrea, Tipperary.
It commences on Friday, August 18, at Moorepark (Teagasc), Fermoy, Co Cork.
The course commences later in August and September in Donegal and Cavan.
The only entry requirement is a good command of the English language, and basic numeracy skills. There is a €250 charge for the course.
Course awards are made on the basis of 60 marks for skills demonstration; 30 marks in a written theory examination, and 10 marks for an oral examination.
The purpose of the course award is to equip the learner with the knowledge, skill and competence to perform and manage the dairy herd milking process.
The course covers milking routines with regard to required milk quality, food safety, dairy herd health and dairy cow welfare for commercial Irish dairy herds.
It equips participants to:
- evaluate the factors that affect milk composition, milk quality and food safety;
- assess sickness and abnormal behaviour in dairy cows in terms of common signs and symptoms;
- appraise best practice bio-security measures to maintain a disease-free herd;
- assess situations where diseases in dairy cows pose risks to milk production and quality, to milking operator health, and consumer health;
- assess legislative, and health and safety issues associated with milking;
- appraise common milking parlour types;
- report clearly on the implementation of any instructions and communications received in relation to the milking process and specific control measures;
- utilise appropriate preparatory and post milking procedures for the milking process;
- assess herd health pre-milking to identify cows which are on heat, lame or ill;
- utilise best practice procedures in regard to operator hygiene;
- utilise recognised best practice procedures in regard to key cow pre and post milking procedures;
- supervise the manual or automatic milking machine washing and rinsing procedure;
- And manage the implementation of risk assessment and hazard control.
For more information, contact Pat Reilly at preilly@frstraining.com or 086-4634155.
