The Dairy Boom

Calfscour

Is the current situation in dairy a boom type situation like we had with houses a few year's ago? New entrants, beef and tillage converting, second units, and everyone has to have 200 cows or more.

There seems to be a conference on every day of the week with people with vested interests pushing for more. Are we farmers taking on too much debt? Sure we have no idea what we will get paid from year to year. Labour is already an issue.

I'm all for people making progress but I really think we are in a dairy bubble and everyone needs to take a step back and evaluate everything. Lots of people who never milked a cow getting wealthy off the backs of farmers...

Muckit

I always maintained there was big money to be made from farming, Just not as a farmer!

yewtree

Calfscour wrote: »

Is the current situation in dairy a boom type situation like we had with houses a few year's ago? New entrants, beef and tillage converting, second units, and everyone has to have 200 cows or more.

There seems to be a conference on every day of the week with people with vested interests pushing for more. Are we farmers taking on too much debt? Sure we have no idea what we will get paid from year to year. Labour is already an issue.

I'm all for people making progress but I really think we are in a dairy bubble and everyone needs to take a step back and evaluate everything. Lots of people who never milked a cow getting wealthy off the backs of farmers...

I was at the dairy conference this week nobody was pushing expansion on anyone, its a personal choice.
the new entrants are a result of the lack of profit in other sectors as much as anything. If you want to farm full time and dont have a huge spf payment, what other options are there?

White Clover

The biggest issue is Labour.
If milk price is not good enough to enable farmers to provide good working conditions and pay comparable rates to other sectors, this will be the downfall of the industry.

Calfscour

blergh wrote: »

https://www.irishtimes.com/news/environment/serious-rise-in-irish-greenhouse-gas-emissions-figures-show-1.3306961

Not relevant keep this thread on topic

Calfscour

yewtree wrote: »

I was at the dairy conference this week nobody was pushing expansion on anyone, its a personal choice.
the new entrants are a result of the lack of profit in other sectors as much as anything. If you want to farm full time and dont have a huge spf payment, what other options are there?

You know as well as me that the profits from Dairy ain't going to make you rich. I'm not trying to belittle anyone or any system but I think that for the return involved for the work and investment needed we all need to stand back and ask is this a boom and if so will there be a bust.

Buford T. Justice XIX

Mod noteRight folks, I've moved the emissions discussion to its own thread, we'll stick with the dairy boom on this one.

Thanks in advance,

Buford T. Justice.

Tigerandahalf

Did anyone see the article in the farmer's journal facebook page some time ago about the Irish lad who is setting up a 10,000 cow unit in Qatar.

They imported most of their dairy products from Saudi/Dubai but are now blockaded by the other Arab nations. So this guy has been hired to manage their own dairy expansion.

What is stopping that type of operation here?

https://www.independent.ie/business/farming/dairy/meet-the-irishman-helping-qatar-import-10000-cows-36286922.html

C0N0R

Tigerandahalf wrote: »

Did anyone see the article in the farmer's journal facebook page some time ago about the Irish lad who is setting up a 10,000 cow unit in Qatar.

They imported most of their dairy products from Saudi/Dubai but are now blockaded by the other Arab nations. So this guy has been hired to manage their own dairy expansion.

What is stopping that type of operation here?

https://www.independent.ie/business/farming/dairy/meet-the-irishman-helping-qatar-import-10000-cows-36286922.html

Milk price wouldn't support it.

Tigerandahalf

C0N0R wrote: »

Milk price wouldn't support it.

Ya they must be getting a hefty price. A lot of milk to stay on the market if their trade barrier was lifted.

Timmaay

Tigerandahalf wrote: »

Ya they must be getting a hefty price. A lot of milk to stay on the market if their trade barrier was lifted.

Yeh that opportunity only arised due to the trade barrier, Qatar suddenly found themselves without nearly enough liquid milk supplies.

liam7831

The milk price will go to fcuk with the market getting flooded with milk

Dakota Dan

Calfscour wrote: »

You know as well as me that the profits from Dairy ain't going to make you rich. I'm not trying to belittle anyone or any system but I think that for the return involved for the work and investment needed we all need to stand back and ask is this a boom and if so will there be a bust.

Where were you in 2015/16?

C0N0R

Tigerandahalf wrote: »

C0N0R wrote: »

Milk price wouldn't support it.

Ya they must be getting a hefty price. A lot of milk to stay on the market if their trade barrier was lifted.

Getting a good price, but labour is a lot cheaper which is one of the bigger costs alongside feed.

Calfscour

Dakota Dan wrote: »

Where were you in 2015/16?

Not making money anyways.... Didn't spend it either

Coolfresian

Don't get excited when the milk price is high and don't panic when it's low. Milk price is cyclical. As well as milking cows, I keep the beef calves and fatten them. I could be glad to have 120 cattle to sell next year. Do your own thinking. Milk is a good price atm but it's not the only game in town.

Calfscour

Coolfresian wrote: »

Don't get excited when the milk price is high and don't panic when it's low. Milk price is cyclical. As well as milking cows, I keep the beef calves and fatten them. I could be glad to have 120 cattle to sell next year. Do your own thinking. Milk is a good price atm but it's not the only game in town.

+100

K.G.

Coolfresian wrote: »

Don't get excited when the milk price is high and don't panic when it's low. Milk price is cyclical. As well as milking cows, I keep the beef calves and fatten them. I could be glad to have 120 cattle to sell next year. Do your own thinking. Milk is a good price atm but it's not the only game in town.

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

tomwaterford

K.G. wrote: »

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

Surly it's to aid with cashflow at times of year when cows are dry I'd imagine?

Timmaay

tomwaterford wrote: »

Surly it's to aid with cashflow at times of year when cows are dry I'd imagine?

Or you could bank 15% of each milk cheque from July to nov...

Calfscour

K.G. wrote: »

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

Don't put all your eggs in one basket is the point he is trying to make. If you have the facilities and milking platform already available to milk then ok. If you have to chase land and expand facilities then you won't return the margin you have mentioned. In a perfect world it would be as easy as you say but not every situation is identical.

Coolfresian

K.G. wrote: »

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

My system works very well for me. Im milking 150 cows and thats all i want to milk atm. I could go to over 200 but why would i or where do i stop? If i can fatten 120 cattle for the factory as well as milking and get a good few of them away at grass every year its a lot more profitable than the figure of 100 euros/head. And if the milk price crashes, i know il be very happy having spread my risk.

jaymla627

K.G. wrote: »

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

Its a slush fund/get out of jail card in my view, whatever about only making "5 or 6 k" if you have 30 bullocks/heifers to go with that will inject 25-30k into the bank account it's a great safety valve to have and in a year like this rearing the calves helps to offset tax and if you have stock relief your laughing

yewtree

K.G. wrote: »

One of my favourites ones how does 100 euro profit on a bullock compensate for a profit crash in you milk.example afarmer milking a 100 cows price of milk falls ten cent hes down 50k in profit.what good is 5 or 6 k in profit from rearing the calves in a year relative to the work and capital involved and the pressure they put on the system

Sums it up for me, if beef was so profitable there wouldnt be half as many new entrants.
I dont see how investing time/capital in low margin enterprises is a good risk management strategy.
Completing a cash flow budget would be a lot less hassle

Mooooo

The same question is asked every 3 to 5 years and in between the opposite question is asked. Tbh if what is being produced now is the lowlying fruit as in milk off owned land etc with not much bought in feed anything extra from now on will be off bought/ rented ground or bought in feed with more debt required to grow and when the bank is being serviced you won't be long figuring out if you are still making money

Who2

yewtree wrote: »

Sums it up for me, if beef was so profitable there wouldnt be half as many new entrants.
I dont see how investing time/capital in low margin enterprises is a good risk management strategy.
Completing a cash flow budget would be a lot less hassle

The facilities and labor involved in milking extra cows would surely leave the beef finishing attractive. He has the calves at cost, the rejected milk and ground. Housing needs to be minimal and it takes damn all time. Probably on an outfarm. He could invest 200k on a new parkour and sheds, hire some lad for 40k per year, run him self ragged and give 40% of what's left over to the revenue.

yewtree

Who2 wrote: »

The facilities and labor involved in milking extra cows would surely leave the beef finishing attractive. He has the calves at cost, the rejected milk and ground. Housing needs to be minimal and it takes damn all time. Probably on an outfarm. He could invest 200k on a new parkour and sheds, hire some lad for 40k per year, run him self ragged and give 40% of what's left over to the revenue.

I would setup a second unit long before i would go finishing catle to use land. Greenfield has shown you can set up a greenfield site and it will give a much better return than any beef system.

I think a lot of lads just like the beef side for a bit of variety which is fair enough but its nonesense to suggest it will make your dairy buisness more secure, beef farming is just too low of a margin.

Who2

yewtree wrote: »

I would setup a second unit long before i would go finishing catle to use land. Greenfield has shown you can set up a greenfield site and it will give a much better return than any beef system.

I think a lot of lads just like the beef side for a bit of variety which is fair enough but its nonesense to suggest it will make your dairy buisness more secure, beef farming is just too low of a margin.

But where do you get the time to milk in the second set up? Can you milk two herds per day long term? 120 finishing cattle consume no more than an hour or so each day. When you take the cost of labor out I doubt the 120 beef cattle would look too bad.

White Clover

yewtree wrote: »

I would setup a second unit long before i would go finishing catle to use land. Greenfield has shown you can set up a greenfield site and it will give a much better return than any beef system.

I think a lot of lads just like the beef side for a bit of variety which is fair enough but its nonesense to suggest it will make your dairy buisness more secure, beef farming is just too low of a margin.

Good points there, but, what about Labour? Dairy farming is labour intensive, beef farming as a rule is not.

Mooooo

Who2 wrote: »

But where do you get the time to milk in the second set up? Can you milk two herds per day long term? 120 finishing cattle consume no more than an hour or so each day. When you take the cost of labor out I doubt the 120 beef cattle would look too bad.

Greenfield includes labour cost

K.G.

Long story short we used to do cattle too and jacked them in and all ill say i never had money or feed for that matter until they were gone ,each to their own.just out of curiousty are you hiring labour and renting ground for these cattle

charolais0153

Imo. Theyre like a bank account thats making 100 euros for every 1300? spent. So that would be 7% interest and then if you run into trouble you have a lot of cattle to sell

yewtree

Who2 wrote: »

But where do you get the time to milk in the second set up? Can you milk two herds per day long term? 120 finishing cattle consume no more than an hour or so each day. When you take the cost of labor out I doubt the 120 beef cattle would look too bad.

Any second unit has to be done with hired labour, milking two herds a day is a non runner.
there are lots of lads making a go of 2nd units with hired labour.
As farmers we have to be able to pay ourselves, so in that sense a 2nd unit is no different to the home farm

Timmaay

If you are lucky enough to own too many acres outside of the milking block you could always longterm lease some out. Tax free income coming in, that would nicely solve your cashflow problems also haha.

mahoney_j

Coolfresian wrote: »

Don't get excited when the milk price is high and don't panic when it's low. Milk price is cyclical. As well as milking cows, I keep the beef calves and fatten them. I could be glad to have 120 cattle to sell next year. Do your own thinking. Milk is a good price atm but it's not the only game in town.

A very good point and one which I fully agree ,but according to some you’d be mad keeping beef cattle justxliad on more cows .nice few quid in beef if done right for dairy farmer with fragmented land

mahoney_j

yewtree wrote: »

I would setup a second unit long before i would go finishing catle to use land. Greenfield has shown you can set up a greenfield site and it will give a much better return than any beef system.

I think a lot of lads just like the beef side for a bit of variety which is fair enough but its nonesense to suggest it will make your dairy buisness more secure, beef farming is just too low of a margin.

That’s the problem nowadays ,all this get bigger and set up second unit ****e ,beef in conjunction with dairy is profitable and vital cash flow source when milk tanks ,I sell calves ,in calf heifers ,sell fr bulls for breeding ,beef heifers in calf and some cattle to year to year and a half .money in it .

mahoney_j

Who2 wrote: »

But where do you get the time to milk in the second set up? Can you milk two herds per day long term? 120 finishing cattle consume no more than an hour or so each day. When you take the cost of labor out I doubt the 120 beef cattle would look too bad.

On the money ,Tegasc and all these Mikey waving conferences leave a lot to be deserved

K.G.

mahoney_j wrote: »

On the money ,Tegasc and all these Mikey waving conferences leave a lot to be deserved

Have to agree with you.i think the number of cows asomeone milks should ñot be mentioned or asked.one thing ill say for our dg group is cow numbers or farm size dosent come into it but they are fine cute lads making a living with no show

yewtree

mahoney_j wrote: »

That’s the problem nowadays ,all this get bigger and set up second unit ****e ,beef in conjunction with dairy is profitable and vital cash flow source when milk tanks ,I sell calves ,in calf heifers ,sell fr bulls for breeding ,beef heifers in calf and some cattle to year to year and a half .money in it .

If beef farming is so profitable why does every beef farmer need an off farm income?
Where did i say bigger was better? I would stand over that effficent lads can expand on to second units and make plenty of money that is a lot different to saying everyone should expand.
The other harsh reality is that for the last 40 years the average dairy herd had expanded and the number of dairy farms have fallen. Will that change in the next 40?

einn32

It's a boom in terms of business size but is it a boom for the bottom line. A case in point was idle talk I heard last week about a guy working 18 hour days milking a few hundred cows. I asked is he making money. "I don't know" was the reply. A few years of milking a couple of hundred cows will turn the boasting into sighs of regret I think. The work is incessant and there is no lifestyle in modern bigscale farming.

Coolfresian

K.G. wrote: »

Long story short we used to do cattle too and jacked them in and all ill say i never had money or feed for that matter until they were gone ,each to their own.just out of curiousty are you hiring labour and renting ground for these cattle

Very little rented ground. Most cattle ran on owned land. No hired Labour on farm, only family help. The family help is an argument for another day, it's rarely factored in costings by teagasc et al. yet a lot of 'one man shows' running a dairy herd have it in the background.

alps

Farmers, as an industry in every country in the world, have always increased their cost of production to align with milk price....this is no different in Ireland..

We will align our costs so as to leave a bargain, and while the country milked 70 cows that margin needed to be 50%, but as cow numbers increase thatbmargain will reduce to 25% and to 15% and so on to be like any other country in the world where freedom to expand existed...

The US, Britain, NZ..,farmers give away their margins, till the point of existence....

And in many of these cases, if they were allowed to roll up debt, they did that too...we saw lifetime interest only, pyramid schemes in land ownership and coop shareholding....anything that can give a lifeline to lack of margin...

We will do it here too, in land rent, in buildings, parlours, machinery.....all increasing in scale with no real increase in profits...

The guy that stands still will be unfairly hit, as his costs like land rent, purchased fodder etc will be pushed to an uneconomical price...

Our processors have already shown us the way forward, massive expenditure, compete and sell against other Irish processors, and repeat the exercise until you have just the minimum margin n left...(liquid milk, and powders internationally)..

It can be difficult not to follow , thinking you are left behind, thinking opportunities will run out, thinking you're "not brave enough"...

Some of us are lucky enough to have witnessed the terminology and the frenzy that existed in the noughties re off farm investments....the same nuances, terminology now....from the same sources....posotive farmers conference, farmers journal in hotel minella Clonmel, massive dedicated tent at the ploughing, weekly farmer investment meetings.......and hundreds of farmers with hard on' s that need satisfying...

I started out by saying farmers as an industry...there are many exceptions...

mahoney_j

yewtree wrote: »

If beef farming is so profitable why does every beef farmer need an off farm income?
Where did i say bigger was better? I would stand over that effficent lads can expand on to second units and make plenty of money that is a lot different to saying everyone should expand.
The other harsh reality is that for the last 40 years the average dairy herd had expanded and the number of dairy farms have fallen. Will that change in the next 40?

I’m talking about beef in conjunction with dairy rather than lumping your lot into all cows with just that sole income ,dairy and it’s expansion is extremely cash,Labour and debt heavy business there’s many lads that were comfortable milking 80/120 cows and keeping some beef that expanded to 150/200 and well above and cut beef out that took on huge debt etc and put whole business under pressure

blackdog1

mahoney_j wrote:

I’m talking about beef in conjunction with dairy rather than lumping your lot into all cows with just that sole income ,dairy and it’s expansion is extremely cash,Labour and debt heavy business there’s many lads that were comfortable milking 80/120 cows and keeping some beef that expanded to 150/200 and well above and cut beef out that took on huge debt etc and put whole business under pressure

If I had the land and sheds I'd still do beef with dairy. Very little time consumed daily and a nice bit of cash when the price of milk is bad. You can use it to keep tax bill up or down too if used correctly.

Keepgrowing

I'm wondering, if beef is unprofitable on professional beef operations how can it be profitable in dairy farms.

Is there cross subsiding happening?

alps

Allocation of fixed costs is where the nub of the arguments will lie, as to how much a dairy farmer can make out of beef....

Mooooo

If lads say it costs 1500 to raise a heifer to calve at 2 years old aside from ai how much cheaper are lads making if finishing stock at the same age?

patsy_mccabe

Lads, lads don't get into beef. We've enough problems with oversupply in the market without ye dairy guys queuing up outside larry' s factory.

charolais0153

patsy_mccabe wrote: »

Lads, lads don't get into beef. We've enough problems with oversupply in the market without ye dairy guys queuing up outside larry' s factory.

It actually means less cattle as dairy lads keep less cows while keeping the calves

mahoney_j

patsy_mccabe wrote: »

Lads, lads don't get into beef. We've enough problems with oversupply in the market without ye dairy guys queuing up outside larry' s factory.

Aghhhh at the last set of protests at meat factories there was more dairy farmers than beef finishers protesting

patsy_mccabe

mahoney_j wrote: »

Aghhhh at the last set of protests at meat factories there was more dairy farmers than beef finishers protesting

The beef guys have no fight left in them.