Ireland’s Dairy Sector Poised for Growth Presentation to Conaprole Dairy Conference, XXX, Uruguy, October 12the 2017 Professor Gerry Boyle, Director Teagasc, Agriculture and Food Development Authority Ireland

Outline of presentation A little about Teagasc A little about the Irish agricultural economy The Irish dairy industry in growth mode Factors underpinning growth Constraints on growth Teagasc Presentation Footer

Teagasc Teagasc – Pronounced “Chawg-ask” means “instruction” Teagasc – The Irish Agriculture and Food Development Authority – research, advisory and education Annual expenditure €180 m. and 1200 total staff – 70% State grant 240 researchers + 240 Ph.D. studentes; 65 subject-matter specialists ; 65 teachers; 250 advisory; 7 research centres; 51 advisory offices and 7 colleges

Some structural features of Irish agriculture 140,000 farmers Avg farm 33 ha 81% pasture Onions 0.043%

Irish dairy product mix 16% of global infant formula market

Rapid change on Irish dairy farms Year Milk Production ( mill. lts.) Cow Numbers (million) Milk Yield/cow (lts.) Fat % Protein% 1984 5,422 1.549 3,811 3.51 3.27 2007/09 (govt. baseline) 4,932 1.005 4,469 3.81 3.33 2014 5,651 1.192 4,740 3.99 3.43 2015 6,399 1.295 4,938 4.03 3.50 2016 6,674 1,347 4,956 4.08 3.46 2020* 7,600 1.466 5,190 4.16 3.54 * Projected

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Dairying returns the highest income to Irish farmers

KPIs of the average, top 20% , bottom 20% of Irish dairy farms Net margin (€/ha) 1,165 2,126 278 Stocking rate (LU/ha) 1.93 2.23 1.69 Concentrates (kg/cow) 926 800 1,091 Days grazing (days) 242 255 229 Kg MS/cow 402 432 365 Total costs (€/kg MS) (cent/l) 3.03 23.4 2.48 19.3 3.78 28.9 Net margin (€/kg MS) 1.37 10.7 2.06 16.0 0.51 3.9 Milk Solids kg/Ha 887 1,019 774 Grass utilised kg/ha 7,796 9,378 6,359

Teagasc research : from farm to gut

Integrating production and processing research Animal & Grassland Programme Food Programme Quality & Safety Pasture Animal Breeding Milk Chemistry Sustainable Systems Research Staff Research Staff Processing 

Innovation the key to growing export markets Technologies to extend shelf life to reach far away Markets SMART ingredients – nutritional base for foodstuffs elsewhere in the world beyond the UK market Cheese diversification, e.g., Cheese for China World-leading expertise in quality / safety, e.g., Beef and Dairy - reassure new buyers in new markets. Leading Analytical Capabilities Cross-Cultural Sensory Studies

Discussion Groups as a technology transfer tool Discussion groups are a key methodology to transfer new technology Increase adoption of technology and management practices Evaluation shows increased financial benefits €9,600 for a 40 hectare dairy farm (€240 x 40) or about 3c/litre Survey results show that farmers join groups primarily to learn and gain information Discussion groups are a valuable peer to peer learning environment The benefits of group membership need to be continually highlighted to overcome one to one culture

Ireland’s grass-based dairy production model productive ryegrass/ clover swards compact seasonal calving high EBI dairy cattle Model ideal for the post quota environment Profitable Competitive Replicable Resilient Sustainable But there’s big scope for improvement … skilled agronomic management

The way forward: relentless focus on improving adoption of ‘best practice’ Dairy Farms 2015 Practice adoption (%) Advisory Contact Non-Advisory Milk Recording 48 21 AI 86 69 Genomically selected bull 54 37 Herd Plus 65 35 e-Profit monitor 9 Regular soil testing (last 5 yrs) 83 67 Re-seeding (2015) 51 Farm grass cover 26 GPS/GIS devices (fertiliser spread. etc.) 10 5 Technical recording devices (collars etc.) 6 Heat detection devices (electronic) 4

Evolution of the EBI

Big improvment in fertility through genetics Phenotypic If we follow the last 4 year’s genetic trend in fertility, by the year 2020 the fertility of Irish females born in 2020 will be what it was in 1989 (which still was below optimum) but we’ll have seen a 60% increase in milk solids. The yellow box is the results from the next generation herd to show that genetics can achieve good performance

Next Generation Herd- 2013 - 2016   Next generation herd National average Milk yield (kg/cow) 5,499 5,704 MS (kg) 448 442 Protein (%) 3.75 3.58 SCC (‘000 cells/ml) 108 126 3 Week Sub. Rate (%) 92 86 Preg. 1st Serv. (%) 60 46 Preg. 6 weeks (%) 73 58 In Calf Rate 12 weeks (%) 81 Mean BCS 2.94 2.77 Mature LWT (kg) 560 570

“Big data”

Milk SSC (1/2) Dairy Practice Adoption: Source: NFS Practice Adoption and Impact Targets – KPI Trends

Grass Utilisation Dairy Practice Adoption: Target: Increase by 0.5t DM/ha year on year Source: NFS Practice Adoption and Impact Targets – KPI Trends

Economic Breeding Index Dairy Practice Adoption: Economic Breeding Index Target: Increase EBI by €10 per cow per year. *2016 figure shown uses old EBI base. All cows scaled back by €71 EBI as of September 2016 base change. Source: ICBF Practice Adoption and Impact Targets – KPI Trends

NO3-N concentration in groundwater (mg/l) Increasing stocking rate/output can be compatible with good environmental performance in a pasture-based system 4.0 6.0 8.0 10.0 12.0 14.0 16.0 1 1.1 1.2 1.3 1.4 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NO3-N concentration in groundwater (mg/l) Fat plus protein production (t/ha) Year Fat plus protein Groundwater NO3-N SR (cows/ha) 2.4 2.6 2.7 2.9 Conc (kg/cow) 741 716 645 636 1202 590 617 288 450 430 N fertilizer (kg/ha) 294 289 296 331 259 313 244 248 252 249