Dairy farms in 2022 have experienced record-high input prices, however margins have appeared to be quite good this year too.
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Based on the Agriland and Irish Creamery Milk Suppliers Association’s (ICMSA’s) Milk Price Tracker, all co-ops have continuously increased their base prices for 10 months this year.

Base price in nearly every co-op was over 50c/L for June’s supply, which many never thought they would see.

With dairy farmers maintaining their margins for 2022, and some possibly improving them, the question now begs: What should they invest in?

Some will straight away look at machinery, but this is likely not going to give a return on investment.

Farmers should make investments that will give them a return or improve their work-life balance. A few examples are below.

Lime

Lime is an obvious investment choice, with every €1 investment in lime returning €8 in pasture production.

Based on a soil sample, farmers should spread lime on paddocks that require it and thus reduce their need for chemical fertiliser.

Another soil-smart investment is clover, which has really come into focus of late.

The best time to establish clover is spring and soil pH needs to be at optimal levels.

Grazing infrastructure

Although materials are expensive at present, it is important to continue to make investments in grazing infrastructure.

Some investments in grazing infrastructure could include:

  • Making more entrances and exits to paddocks;
  • Updating water systems;
  • Replacing damaged or old post and wire;
  • Adding new roadways.

Investment in grazing infrastructure will also offer a return on investment.

Better grazing infrastructure makes it easier to manage cows and grass, thus resulting in better production and better milk solids output/cow.

Farmyard

Large investments in the farmyard are unlikely this year due to the high cost of materials.

However, investments in technology, such as small improvements to the milking parlour like installing automatic cluster removers, could prove worthwhile.

Another option could be investing in a drafting gate that can be controlled from the pit of the parlour, or heat detection and health-monitoring collars for your cows that could be linked to your drafting gate.

Key message

The take-home message should be to invest wisely; make investments in areaa that will offer you the best return. This may be in terms of direct financing, or it could be a return on quality of life i.e. giving you a better work-life balance or saving on labour.

Speaking at the recent Ballyhaise open day, Dr. Joe Patton, head of Knowledge Transfer with Teagasc said: “When we talk about labour saving, we mean genuine labour saving – not gadgets and gimmicks.

“I see a lot of people invest in labour-saving devices just to make themselves busy.”

NEW ZEALAND DAIRY COOPERATIVE FONTERRA WILL RETAIN ITS AUSTRALIAN OPERATIONS, CEO MILES HURRELL ANNOUNCED WHEN RELEASING FY22 RESULTS. THE COOPERATIVE HAD A “GOOD YEAR” DESPITE RISING COSTS DUE TO VOLATILITY IN SUPPLY CHAIN, HURRELL SAID.

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