David McWilliams, ag article

blue5000

http://www.davidmcwilliams.ie/2015/09/28/food-sector-sows-seeds-of-growth#comment-160814

Hope the link works, David would like to know what it's really like at the grass roots......

kowtow

blue5000 wrote: »

http://www.davidmcwilliams.ie/2015/09/28/food-sector-sows-seeds-of-growth#comment-160814

Hope the link works, David would like to know what it's really like at the grass roots......

I wonder whether he'll spot the bubble this time?

blue5000

Land prices?:)

Jimlh86

I think it would be very sad to see small Irish farms flattened into big fields and feedlots if we were ever to go down that route!

Jimlh86

I think it would be very sad to see small Irish farms flattened into big fields and feedlots if we were ever to go down that route!

Sam Kade

Jimlh86 wrote: »

I think it would be very sad to see small Irish farms flattened into big fields and feedlots if we were ever to go down that route!

Flattened into big fields? How would that work under cross compliance?

20silkcut

Jimlh86 wrote: »

I think it would be very sad to see small Irish farms flattened into big fields and feedlots if we were ever to go down that route!

Yes the Dutch landscape is pretty stark flat and featureless. If Dolly Parton laid down on a bed in Amsterdam she'd have the two biggest hills in Holland.

Jimlh86

Sam Kade wrote: »

Flattened into big fields? How would that work under cross compliance?

If theirs money to be made for the taxman rules can change!! It's a very industrial way of farming IMO.

Deepsouthwest

blue5000 wrote: »

http://www.davidmcwilliams.ie/2015/09/28/food-sector-sows-seeds-of-growth#comment-160814

Hope the link works, David would like to know what it's really like at the grass roots......

A v interesting read, I had no idea how huge and successful Dutch agriculture is. And he's right about the same possibilities existing for Ireland.
People already getting caught up in the hype about Ireland being flattened like Holland,Holland started flat, it's its natural topography, agriculture didn't flatten it, and agriculture won't flatten the hills and mountains of Ireland either. Let's concentrate on the positives for a change.

Buford T. Justice XIX

Jimlh86 wrote: »

If theirs money to be made for the taxman rules can change!! It's a very industrial way of farming IMO.

Nothing to do with the taxman.

Cross-compliance is an European directive that doesn't allow landscape features to be taken away unless strict rules are complied with, like replanting the equivalent length of a hedge that is removed.

It's a pity the same rules aren't enforced for urban building, what fun we would have:D

kowtow

Not really sure why he picks Holland here - on a fully costed basis Holland is about the most competitive / productive producer in Europe (tied with the UK oddly) whereas Ireland is at the opposite end of the scale, the 2nd most expensive producer I think.

Holland & UK both intensive / indoor producers which Ireland is unlikely to ever be - not only because we have chosen to go the grazed grass route - but more particularly because without a liquid milk market we simply couldn't afford to feed our cows. It's not the size of our farms which separates us from Holland, but the size of the local market.

Certainly Ireland's larger farms are marginally more competitive than the smaller ones, but larger farms would not make us more competitive than Holland or the UK and it certainly wouldn't make us profitable as the margin is not there in our target market (powders).

In this case New Zealand is the better comparison, for what it is worth.

keep going

Ah fgs, poor old david was feeling left out of the ploughing media frenzy and had to get in on it . definitely this article was cobbled together thursday night after a quick google.the thing a out david he is always spot on but he always gets his timing wrong so you still wrong.are we going to see a seismic change in ireland , I think not but you are going to see a continuation of the constant evolution.look around your area , how many farms are the same as they were 20 years ago.i was at a gathering lately where there was a good few dairy farmers and many felt that quotas going was not making much difference after all.some were expanding, some contsrauined by landsome didnt want to change most felt they were just as challenged to make a living as before.so unless there is some huge political intervention either at home or abroad its business as normal for the future

Nekarsulm

Was in Holland as part of an Agri Tour group some years ago. Don't know if things have changed much since, but there was huge indebtiness in the industry. For example, if I understood correctly, a farmer could not transfer the farm to a child, the child must buy it at market price.And none of this "buy it from me, and I'll give you back the money tomorrow and just pay off the loan the day after" stuff, it was tightly regulated. They seemed to be really running to stand still, and that was a decade or more ago. Can't see any advantage in hurrying down that road any more than necessary.

Deepsouthwest

kowtow wrote: »

Not really sure why he picks Holland here - on a fully costed basis Holland is about the most competitive / productive producer in Europe (tied with the UK oddly) whereas Ireland is at the opposite end of the scale, the 2nd most expensive producer I think.

Holland & UK both intensive / indoor producers which Ireland is unlikely to ever be - not only because we have chosen to go the grazed grass route - but more particularly because without a liquid milk market we simply couldn't afford to feed our cows. It's not the size of our farms which separates us from Holland, but the size of the local market.

Certainly Ireland's larger farms are marginally more competitive than the smaller ones, but larger farms would not make us more competitive than Holland or the UK and it certainly wouldn't make us profitable as the margin is not there in our target market (powders).

In this case New Zealand is the better comparison, for what it is worth.

But the crux of the whole article was that they exported €79 million worth of produce, over 4 times what we export. Their own market doesn't come into it.

kowtow

Deepsouthwest wrote: »

But the crux of the whole article was that they exported €79 million worth of produce, over 4 times what we export. Their own market doesn't come into it.

Their own market may be very important in it.

Firstly, a large part of the €79 billion may be outside dairy - cut flowers and salads are huge I think... and even within dairy there is cheese to consider. Ireland doesn't have any long standing indigenous cheese at all, let alone anything on the scale of Edam which has been a massive export for centuries.

But leaving those aside, Dutch COP per litre with all costs included is lower than Ireland - presumably due to high input / high output. Their cash cost of production is higher than Ireland. It is - presumably - the Dutch local market which makes it possible to achieve the high levels of production per labour unit because it takes a liquid milk price to support that model.

Ironically, the milk they are exporting into our markets is almost certainly the the (relatively) unprofitable surplus made possible by their high levels of production. It wouldn't pay their fixed costs (doesn't pay ours, come to think of it)... but they have the liquid local market to do that so they can drive on. The export milk is "marginal milk"

Not sure if I explained that very clearly but I think it is the point which we all keep missing when we look at these EU production stats.

Edit:

Put another way, the Dutch average farmgate price is 10% higher than Ireland and 33% of their production is absorbed at home as liquid.

Consider that Dutch liquid milk might be going at +20% over our export price, while Dutch surplus goes at -10% (below our export price). Those figures are notional but it's possible for their exports to be cheaper than ours while their average farmgate price is higher than ours (and as a consequence, they can afford an intensive system which is enough to pay their fixed costs & wages).

blue5000

A lot of dutch milk is produced with cheap imported grains and by-products, if they grow cereals it's not being used to feed cattle, except maybe for maize silage. Horticulture I reckon is where the big money is coming from in Holland.

RightTurnClyde

Nekarsulm wrote: »

Was in Holland as part of an Agri Tour group some years ago. Don't know if things have changed much since, but there was huge indebtiness in the industry. For example, if I understood correctly, a farmer could not transfer the farm to a child, the child must buy it at market price.And none of this "buy it from me, and I'll give you back the money tomorrow and just pay off the loan the day after" stuff, it was tightly regulated. They seemed to be really running to stand still, and that was a decade or more ago. Can't see any advantage in hurrying down that road any more than necessary.

That's some of the reason for the debt. They avoid tax by transferring the farm+the debt ( debt is the same value or near the value of the farm). We get away with that problem here, with Agri relief.
I think....that's how it was explained to me anyway.

Bellview

his article is very similar to a speech given by Coveney at an event I attended about 3 months ago, although Coveney spoke about NZ more than Netherlands.. some good discussion points but not a lot of functional ideas that you could execute on easily.

atlantic mist

farming output, which is just above €4 billion, and agricultural and food output, which is €24 billion,

are those figures correct. some serious value added to our produce

grandfather used always said only people who make money in the wolrd are good middle men

Dawggone

Every sizeable dairy farm that comes up for sale in France is being chased up by the Dutch. Why?
Land makes between €35k and €70k per ha. Also indebtedness is heavy...

Kowtow is correct. They add value...

50HX

here's a thought after reading that article

why don't we go in the other direction.... i'

instead of competing on a euro & global level for the milk,beef grain markets etc with our current systems why don't we identify the niche markets (organic, higher welfare low carbon emssions etc) and become the global leaders in this.

from what i see on dairy & beef systems is that we have

1- a 80-90 one man show running a dairy farm - any bigger & it needs more labour
2 - majority of beef is on a part time basis

on a global scale the majority of farming in this country is v small scale & only for the sfp how many of us would be at it??

sure aren't we looking at the bord bia ads for lamb " it's the rain that grows the grass that give it the taeschte:)

surely with proper funding/mentoring & guidance we can gradually steer away from competing with the big boys on a global scale

i'll probably have stepped on a few toes here with this post & holes will be punched in it but minus the sfp & farming in this country is not viable

is that really where we want to be in the future?

The Cuban

Ive seen small poor west of Ireland farms producing top class weanlens. Id like to see the dutch try and farm some of these wet heavy farms. You cant compare the two countries like that.

st1979

Lot of talk about dutch liquid price and surplus price. Thats not how there system works that i could see.
Ireland works on a different system that the most of the rest. I was over in holland on agri tour 2 yrs ago and they had a very similar milk price per litre when you went back to a standard litre of 3.6 fat 3.3 protein. No talk of a liquid price as they all produce a level supply to keep robots at full capacity. I was comparing our manufacturing price to theirs.
They all bought in the maize on a cost per ton basis from there local tillage farmers maybe 7-10 miles away at a cost of €45 per ton (similar to what irish farmers charge delivered in). Also there maize didn't look better than ours, but i am sure that they get more tons per acre than we do. But that is only a benefit to the tillage guy as dairy man paid per ton.
I saw no sign of cheap products one fed brewers grains which was similar priced to what i can buy them in ireland. Same guy fed imported super pressed beet pulp which came by lorry from paris at the same cost that i could buy whole sugar beet delivered to me.
all the rest of the farmers just fed maize and grass silage and in summer (early may till october) fed grazed grass.
They all needed 9 mts slurry storage and to spend a fortune on aesthitis of the shed when they went to build a new shed for planning permission. Like all had to put a red brick skin around all the sheds. Their yards were nicer and cleaner than most factories in ireland no scrap machinery etc.
Robots used everywhere possible to get max production at low labour.
And none of them make a profit. Or at least a taxable one. Because for a system that seems so high cost with little profit. Everyone of them would buy land if it came up next door at a price of 25k per acre.
Not a perfect system but it always seems to be ridiculed in ireland. And how crazy it is. But as one of the lads on the trip complained that his best friend is his welder to keep everything fix the whole time.

visatorro

50HX wrote:

instead of competing on a euro & global level for the milk,beef grain markets etc with our current systems why don't we identify the niche markets (organic, higher welfare low carbon emssions etc) and become the global leaders in this.

Never going to happen because paddy is too greedy and will fook it up for everyone.

Dawggone

st1979 wrote: »

Lot of talk about dutch liquid price and surplus price. Thats not how there system works that i could see.
Ireland works on a different system that the most of the rest. I was over in holland on agri tour 2 yrs ago and they had a very similar milk price per litre when you went back to a standard litre of 3.6 fat 3.3 protein. No talk of a liquid price as they all produce a level supply to keep robots at full capacity. I was comparing our manufacturing price to theirs.
They all bought in the maize on a cost per ton basis from there local tillage farmers maybe 7-10 miles away at a cost of €45 per ton (similar to what irish farmers charge delivered in). Also there maize didn't look better than ours, but i am sure that they get more tons per acre than we do. But that is only a benefit to the tillage guy as dairy man paid per ton.
I saw no sign of cheap products one fed brewers grains which was similar priced to what i can buy them in ireland. Same guy fed imported super pressed beet pulp which came by lorry from paris at the same cost that i could buy whole sugar beet delivered to me.
all the rest of the farmers just fed maize and grass silage and in summer (early may till october) fed grazed grass.
They all needed 9 mts slurry storage and to spend a fortune on aesthitis of the shed when they went to build a new shed for planning permission. Like all had to put a red brick skin around all the sheds. Their yards were nicer and cleaner than most factories in ireland no scrap machinery etc.
Robots used everywhere possible to get max production at low labour.
And none of them make a profit. Or at least a taxable one. Because for a system that seems so high cost with little profit. Everyone of them would buy land if it came up next door at a price of 25k per acre.
Not a perfect system but it always seems to be ridiculed in ireland. And how crazy it is. But as one of the lads on the trip complained that his best friend is his welder to keep everything fix the whole time.

Soooo what did you learn?
Irish quasi NZ system is the only way?

Phuckin Dutch fools...!!!


Btw I'm not in favour of Dutch system,..
BUT, they make a living.


See, I don't understand how the Dutch survive and the Irish struggle...explain?

kowtow

visatorro wrote:

Never going to happen because paddy is too greedy and will fook it up for everyone.

Irish agriculture is full of contradictions.

It always surprised me that for a country with small farms and livestock rverywhere we have such a low organic take up and massive fertiliser use.

And that our tiny beef herds - the most natural niche producers imaginable - seem determined to produce commodity beef.

We are family farms for the most part, but all our talk is of factories.

We inherit the most expensive farmland in the world, and announce to the world that we're prepared to work it for nothing.

And while we love cursing our politicians, we don't really take a business plan seriously unless it's handed down from on high, a day late and a dollar short.

I'm not sure if it's greed, but we're certainly gluttons for punishment.

Dawggone

kowtow wrote: »

Irish agriculture is full of contradictions.



We are family farms for the most part, but all our talk is of factories.

We inherit the most expensive farmland in the world, and announce to the world that we're prepared to work it for nothing.

And while we love cursing our politicians, we don't really take a business plan seriously unless it's handed down from on high, a day late and a dollar short.

I'm not sure if it's greed, but we're certainly gluttons for punishment.

+1. Thanks Kowtow. I love it..."A day late and a Dollar short"...


"Handed down from on high". Was it Voltaire that said you know the power by what you cannot criticize?

patsy_mccabe

I had a look at the McHale farm machinery stand at the ploughing. They had a shop on site that couldn't keep the hats, coats, toy models churned out fast enough. It really got me thinking about how important brand management and the whole marketing side of things are.

Cow Porter

A nation of tall cheese-eaters - http://www.bbc.co.uk/news/magazine-34380895

kowtow

Cow Porter wrote:

A nation of tall cheese-eaters -

The tall gene triumphs because over there it's the only way you're going to get a view.

st1979

Dawggone wrote:

Soooo what did you learn? Irish quasi NZ system is the only way?

Learnt we shouldn't be so cocky thinking we so low cost. Seen a guy with 40 cows with 800k debt which he was servicing plus taking a moderate wage from.
Biggest thing I learnt was a dutch man could come to Ireland and replicate his exact system here. His feed cost would be similar his milk price similar. But his capital cost of land and buildings would be a lot lower. There would be no need for a cobble courtyard in front of his shed or 9 months slurry storage etc.
Plus he wouldn't need to pay to get rid of his slurry.
The sheds they had were serious but I felt they didn't need to be so lavish. But if you can afford it why not.

kowtow

st1979 wrote:

Learnt we shouldn't be so cocky thinking we so low cost. Seen a guy with 40 cows with 800k debt which he was servicing plus taking a moderate wage from. Biggest thing I learnt was a dutch man could come to Ireland and replicate his exact system here. His feed cost would be similar his milk price similar. But his capital cost of land and buildings would be a lot lower. There would be no need for a cobble courtyard in front of his shed or 9 months slurry storage etc. Plus he wouldn't need to pay to get rid of his slurry. The sheds they had were serious but I felt they didn't need to be so lavish. But if you can afford it why not.

Think I might make the new she'd two tier after reading that.

Did anyone ever try and do the numbers on that model? Because contrary to the assumptions of Dave mc Williams, a small family farm with a million litres a man might actually put food on the table....

patsy_mccabe

Ya, but that Dutch model is based around milk quota prices for milk. Let's see just how resilient that model is going forward, without some kind of state intervention or support.

kowtow

patsy_mccabe wrote:

Let's see just how resilient that model is going forward, without some kind of state intervention or support.

You mean resilient / sustainable in the Irish sense... "willing to work for free"?

patsy_mccabe

kowtow wrote: »

You mean resilient / sustainable in the Irish sense... "willing to work for free"?

I don't follow. It's not like somone is holding a gun to your head. Farming is a business, just like any other.

So what are you suggesting? Add more value at processing level so that a higher price can be passed onto farmers OR dump the low cost production model and go all Dutch with high ouput, low margins.

Deepsouthwest

kowtow wrote: »

Think I might make the new she'd two tier after reading that.

Did anyone ever try and do the numbers on that model? Because contrary to the assumptions of Dave mc Williams, a small family farm with a million litres a man might actually put food on the table....

A small family farm doing a million litres, equates to over 200 cows considering that the average for this country is around 1000 gls/cow. Nothing small about that farm, and for one man to do it he must be working 25/7!

kowtow

Deepsouthwest wrote: »

A small family farm doing a million litres, equates to over 200 cows considering that the average for this country is around 1000 gls/cow. Nothing small about that farm, and for one man to do it he must be working 25/7!

What's the average yield in Holland?

Timmaay

kowtow wrote: »

What's the average yield in Holland?

I'd be surprised if it's anything less than 10kl, which is what, 2200gls? Surely the Irish average yield is closer to 1200gls/5500 litres? Still 180cows which is too many for any one man system.

kowtow

patsy_mccabe wrote: »

I don't follow. It's not like somone is holding a gun to your head. Farming is a business, just like any other.

So what are you suggesting? Add more value at processing level so that a higher price can be passed onto farmers OR dump the low cost production model and go all Dutch with high ouput, low margins.

Adding more value through processing is always the right answer, and so it should be.. the question is how and where in the chain...

As far as the "dutch" model is concerned, I'd like to know if it would work here, but I have a hunch that it could not, and that intensive models can only be supported by premium local liquid markets, their farmgate price being a blend of steady premium & volatile surplus.

If my hunch is correct then the ending of quotas actually presents more challenges than opportunities for Ireland (absent a premium market)... because the principal effect of quota removal will be to increase volume from the rest of Europe in the surplus / spot market, where we operate without scale, with high EU costs, and without the protection of local liquid. We may not be New Zealand, but we are in danger of being the New Zealand of Europe.

We've already seriously misstated (on an institutional level) our competitive advantage, by ignoring non-cash costs... what I'd like to see (instead of just increased targets and crossed fingers for 2025) is a really good critical assessment of our strategy as the market develops around it.

But yes, always always target premium products - and probably not on such a top-down corporate / industrial scale if we want to actually exploit the real value that the world already sees in the Irish family farm.

The fragmented land and the family could yet be our saviour.

kowtow

Deepsouthwest wrote: »

A small family farm doing a million litres, equates to over 200 cows considering that the average for this country is around 1000 gls/cow. Nothing small about that farm, and for one man to do it he must be working 25/7!

I was thinking of the one man family farm but with 10,000 litre indoor cows... the Dutch model in Ireland..

kowtow

Here's a set of intensive intakes & outputs:

11,500 litres @ 3.78 fat, 3.09 protein cell count sub 100

TMR ration ? 18kg silage of which 60% maize

6 - 11 kg ration (base 6, balance to high yielders) between 16-18%

milking 3 times / day.

Anyone with the figures to hand want to translate that into an Irish context?

Dawggone

Great debate.
European high output system relies on very cheap maize production. Something that's not possible in Ireland/UK.

Dutch are addicted to farm buildings. Is Carlsberg made in Holland?


To busy to get involved...

Dawggone

kowtow wrote: »

Here's a set of intensive intakes & outputs:

11,500 litres @ 3.78 fat, 3.09 protein cell count sub 100

TMR ration ? 18kg silage of which 60% maize

6 - 11 kg ration (base 6, balance to high yielders) between 16-18%

milking 3 times / day.

Anyone with the figures to hand want to translate that into an Irish context?

Simplifying...26kgdm maize with soya to balance. 11,500l possible on 2milkings/day.

kowtow

Dawggone wrote: »

Simplifying...26kgdm maize with soya to balance. 11,500l possible on 2milkings/day.

If you got autosteer in that tractor you could probably work out the cost...

Dawggone

kowtow wrote: »

If you got autosteer in that tractor you could probably work out the cost...

€25k to turn a steering wheel?

Established on another thread that maize is ~3cent/kgdm...

keep going

Beginning to think that we thinking too much About stuff way out of our control.

st1979

Dawggone wrote:

Great debate. European high output system relies on very cheap maize production. Something that's not possible in Ireland/UK.

I am sure they can grow more maize for lower cost. But the guys I saw were just buying it from tillage men per ton. As they said it was cheaper than buying land to grow it on. Then they paid to spread their slurry on the tillage mans land.
It was just interesting to see a different way of doing things. And for some farms it might suit better in Ireland to look at this way. 100 miles north of me its quite a common system due to fragmented farms that are wet and find grazing on shoulders difficult. Yet they seem to be able to undercut our liquid milk market. And I know they are all going to go out of business. I have listened to that mantra for the last 20yrs. But we are now hearing of plenty of new Zealand guys going to go out of business this year too.

st1979

Dawggone wrote:

Great debate. European high output system relies on very cheap maize production. Something that's not possible in Ireland/UK.

I am sure they can grow more maize for lower cost. But the guys I saw were just buying it from tillage men per ton. As they said it was cheaper than buying land to grow it on. Then they paid to spread their slurry on the tillage mans land.
It was just interesting to see a different way of doing things. And for some farms it might suit better in Ireland to look at this way. 100 miles north of me its quite a common system due to fragmented farms that are wet and find grazing on shoulders difficult. Yet they seem to be able to undercut our liquid milk market. And I know they are all going to go out of business. I have listened to that mantra for the last 20yrs. But we are now hearing of plenty of new Zealand guys going to go out of business this year too.

kowtow

Just been looking at the volatility of the Netherlands spot raw milk price compared to the Netherlands average farm gate prices.

Difficult to copy on phone but very revealing.

Netherlands average farm gate July was 30eur kilo.

Netherlands spot milk raw July was 23.10 .. can't be certain of standardisation but this is the milk traded outside the co ops. 10% or more of national production.

Ireland average 27 approx for July.

The Netherlands spot price has ranged from 21 to 26 since may. It's a volatile figure compared to their stated average price and illustrates perfectly what I said above about blended prices and surplus milk.

Nekarsulm

I have only been on a few Dutch farms, and these were chosen for visits from foreigners ( us) so may not be typical, but jeez, they were more than half in love with shiny metal.

Milked out

st1979 wrote: »

Learnt we shouldn't be so cocky thinking we so low cost. Seen a guy with 40 cows with 800k debt which he was servicing plus taking a moderate wage from.
Biggest thing I learnt was a dutch man could come to Ireland and replicate his exact system here. His feed cost would be similar his milk price similar. But his capital cost of land and buildings would be a lot lower. There would be no need for a cobble courtyard in front of his shed or 9 months slurry storage etc.
Plus he wouldn't need to pay to get rid of his slurry.
The sheds they had were serious but I felt they didn't need to be so lavish. But if you can afford it why not.

Two things there, he may have debt of 800k but over what term and what are costs of that money. It is likely to be better on the continent than here. Also I would be surprised if our feed costs would be similar for the type of cow that he is likely to be milking or that we could have a consistency of quality for those type of cows. I could be wrong but until it was actually done I would find it hard to believe