Dairy chit chat II

Interestingly I would say that the average founder/ small business owner or indeed vested executive in a tech company would also be doing about that in comparison to the "regular full timers" in the office.. if such a thing exists nowadays in some companies. how did they measure it? Hours worked?

Some series tripe in the journal this week on taking on a second unit, standout assumptions average milk price of 30 plus cent, 21 cent a litre production costs including labour/rent/interest costs....
Standout figure is you'll clear 1.7 million after 20 years once lease is up, the only question I have is why is Aidan wasting his time with the farmers journal when the above can be made on rented units

jaymla627 wrote: »

Some series tripe in the journal this week on taking on a second unit, standout assumptions average milk price of 30 plus cent, 21 cent a litre production costs including labour/rent/interest costs....
Standout figure is you'll clear 1.7 million after 20 years once lease is up, the only question I have is why is Aidan wasting his time with the farmers journal when the above can be made on rented units

Just after reading the article, that is a fairly serious distortion of what was said . All costs have been put in a table and nowhere is 21 cent suggested as total costs. The buying options is in negative cash flow for duration of the 20 years.
It starts off by saying not for everyone and most lads better off to concentrate on home Farm.

There's an article referenced on the journal dairy Twitter today with the headline "nearly half of all herds are now over 100 cows".

It refers I think to a teagasc report which among other things says nearly half of Irish cows are part of herds bigger than 100 which of course is a totally different thing.

Billionaires own more than half the money in the world. That doesn't make half the people in the world billionaires.

I'm amazed that the journal could make such a schoolboy error in statistics and turn it into an article. I did challenge them about it on Twitter but they are silent.

kowtow wrote: »

There's an article referenced on the journal dairy Twitter today with the headline "nearly half of all herds are now over 100 cows".

It refers I think to a teagasc report which among other things says nearly half of Irish cows are part of herds bigger than 100 which of course is a totally different thing.

Billionaires own more than half the money in the world. That doesn't make half the people in the world billionaires.

I'm amazed that the journal could make such a schoolboy error in statistics and turn it into an article. I did challenge them about it on Twitter but they are silent.

Worse again Agriland have that as a direct quote from Gerry Boyle, one of the leading teagasc 'experts'.

yewtree wrote:

Agree on this don't know how brennnan gets so much print space As he is so one dimensional and black and white in what he preaches onlyinterested in Mickey waving figures which once examined don't stack up ,there is a half hearted attempt lately to input labour figures into costs of production ,needs to. E fully costed with actual figures also for articles similar capital costs of repayments need inclusion

[/quote]

You were at the teagasc conference yesterday I think?

Did they repeat the half the farms in Ireland are more than 100 cows figure? .. as the article on Agriland suggests.

I can't imagine they did unless I have seriously misunderstood something but..... so much outside the farmgate in this country is statistics. I'd like to think that those who prepare them and report them have a basic level of competence.

yewtree wrote: »

kowtow wrote: »

There was a figure on the % of herds milking more than 100 cows, it has increased by a lot put I can't remember the exact number. It's fair to say herd size is increasing with all the associated issues with labour

The only figure I can recall - and I don't know where I saw it - is that 47% of cows are now milked in herds of greater than 100, I think that is up 10% or more on the last survey.

I could be totally and utterly wrong, in which case I'll be the first to apologize, but if more than half the herds were over 100 cows I'd be shocked.

OK, I have found the relevant paragraph from the Teagasc report, which is actually the labour one and I suspect is well worth reading.

Average herd size has increased from 45 cows in 2005 to 76 cows in 2016. Excluding dairy
farms milking less than 30 cows (who can potentially double in herd size without requiring
extra labour), the average herd size of the remaining 15,339 dairy herds in 2016 is 87 cows.
Additionally, the proportion of cows in herds of greater than 100 cows has increased from
13% in 2005 to 47% in 2016. The number of dairy farms with herds greater than 100 cows has
increased from 1,080 (4.5%) in 2005 to 4,262 (23%) in 2016. The average herd size for farmers in
this category is now 155 cows. Figure 3 shows the rate of increase in herds with greater than
100 cows with much of the growth happening in the recent 2013-2016 period.

It turns out that not quite one quarter of farms are over 100 cows, a very different picture from the one being touted both in the journal and in the Farming Independent. I certainly don't mean to harp on about this - but when you think about it so many of the figures which are thrown out, including financial figures, are themselves derivations from statistics. When you are told that "every missed heat costs x" or "every extra day at grass earns y" you are being given an average profit multiplied by an average herd on an average farm. Which average is used is often picked simply to support the point of the writer of the article.

Teagasc gives us wonderful, generally pretty complete, research. It is up to all of us - farmers first, but most of all perhaps journalists and commentators of one sort or another - not to misuse the research and to take care that when we summarize it we do so accurately.

So it turns out that my three neighbors milking 70, 80 or 90 cows, each differently, each brilliantly and each with a careful eye to their own system aren't in fact in the "lower half" of the countries herds for size, soon to be left behind and eclipsed by the majority, but are actually what we always knew them to be - very good farmers making the most of what is in front of them, optimizing return on capital (whether inherited or not) and - thankfully - taking a lot more care over what they do than some of the journalists who would seek to lecture them.

The heifers must have taken the hint.

Put kamars on them the day before yesterday and just served the first 3.

Used respectable bulls as at least one of those heifers hasn't the correct number of relations.

yosemitesam1 wrote: »

I'm not sure I'd agree with that for the majority of their research. There isn't really the desire to develop a broad understand how things work, instead it's almost always a case of oversimplify as much as possible in order to come up with a model or headline and apply that straight across the board as if it encompasses everything.
It would be great if there was a few lads at least who'd look at and try to gain an understanding and appreciation of the bigger picture.

I know what you mean. Take the beginning of the people in farming report:

Since 2013 alone, Ireland has increased milk production by 23% (from 5,423 to 6,674 billion
litres; CSO, 2016).
...... As a consequence of the increased milk production
in Ireland, the export value of Irish dairy products and ingredients has increased from
approximately €2.3 billion in 2010 to €3.4 billion in 2016 [thats a 47% increase]

When I read that my mind wants only to know why they have chosen 2013 for the base year of expansion but 2010 for the base year of exports. The obvious implication is that, if they hadn't, the paragraph would read:

Since 2013 alone, Ireland has increased milk production by 23% (from 5,423 to 6,674 billion litres; CSO, 2016)....... As a consequence of the increased milk production in Ireland, the export value of Irish dairy products and ingredients has increased from approximately €2.9 billion in 2013 to €3.4 billion in 2016 [thats a 17% increase - less than the growth in production]

Now we all know that prices play a big part here, if the years were 2013-2017 it would look different - and anyway, a 17% increase in exports is a brilliant achievement. But when you look at the way some of the figures are distilled you can't help thinking you are being taken for an idiot!

Incidentally, it's easy for me to sit here picking holes in a report but that document contains a whole lot of interesting figures and tables, particularly for hours / cow, cow numbers per FTE, and all sorts of discussion. We've all been carping on for ages about how labour ought to be properly figured etc. etc. (and it seems to me that things are changing in that area) .. and discussing on here the appropriate rates and outputs from additional labour ..... but really everybody should read that report with an open mind. Whether or not you agree with Teagasc or with the conclusions and suggestions, a lot of legwork has been done to put together the inputs, and I certainly wouldn't be planning or modelling any kind of dairy expansion without taking into account some of the assumptions and research in that report.

If you want to figure the labour cost per litre for anything from 30 cows to 250 that document contains everything you need as a starting point.

kowtow wrote: »

The biggest issue on a quick reading of those figures is that, while the author assumes that the price of land will rise by 1% p.a. between now and the end of 20 years he makes no allowance (as far as I can see) for a rent rise during that period.

At a rent of €200 / acre now, he is assuming that a landlord will accept a return of 1.7% on his capital (the land). Whilst that is a losing proposition for the landlord, in today's climate of negative interest rates & tax free land leases it is at least possible to imagine someone signing up.

But if the rent doesn't rise over the period of the lease the landlord is going to be getting 1.4% approximately, which is a negative return even at today's rates of inflation. I'm not sure anyone will sign up to 20 years of that.

If the figures in that table are correct, which is doubtful enough, the Landlord is going to be a fair bit poorer in 20 years time than today. The better approach would probably be to consider the whole proposition over 7 or 10 years and make no assumptions about land price inflation.

Where would that leave the reader?

To be fair any bps is returned to landlord in table so that will leave the ground returning anywhere from 350-450 total going forward, plus rental income is tax free....
Of course the danger to the owner is his ground could be mined of p and k and generally ran into the ground as the lease nears its end, would love to see a proper analysis done though on say how a second unit would stack up against a unit that simply builds extra accommodation on home farm/extends parlour etc and simply just ramps up production by having higher yielding cows that are fed a 1.5 ton meal a year doing 580kys milk solids and buffered with feed from outside rented blocks

Lads some of ye can get awful worked up by what Aidan or jack write.... At the end of the day they have to write some rameish to justify the wages there getting and the journal needs to fill a few pages.... The reality is Aidan and Jack haven't a clue.... They never milked a cow in their life... The journal is looking more and more like a schoolbook for junior infants......

So jay et al.... I'd buy a few penny sweets and be chewing on them instead of buying the journal or comic as some lads here call it......

yewtree wrote: »

Increasing production is grand but are you increasing profit/ha? more milk doesn't mean more money,the work in lyons estate isn't claiming to be any more profitable/ha that low cost grass based systems.
A lot of the guys i see with second units run simple systems stocked about 3/ha, very little buffer feeding, block calving. i dont think its any more complicated than the alternative of trying to push stocking rates and having to buffer feed or zero grazing.

Why milk 2 cows when one will do same and more ,hi input /output units run ala Lyons estate with emphasis on grass and fty will churn profit in right hands

jaymla627 wrote: »

The crux of the problem is to achieve a low cost grassed based system on a undeveloped block you have to spend a small fortune on roadways/water/reseeding/fencing etc along with signing a long term lease tying yourself to this ground , I'll admit I'm biased as pushing cows here and aiming for 600kgs plus ms cow a year, but in my mind if dairying where to enter a period where the arse falls out of it, your a hell of alot less exposed in a system where you can simply drop back cow numbers, give up rented ground and simply batten down the hatches with relatively low debt levels, as opposed to the alternative of been borrowed to the hilt on a rented/bought second unit that you simply have to continue farming as you've no choice in the matter

A week or so ago you were advocating keeping beef stock despite the fact that the specialist beef guys struggle to make it pay.

If I reading this right your advocating renting land on a conacre basis in order to drop it when milk price drops.

Could you develop this?