The economics of dairy feed systems: Risks and opportunities for Irish farms
Knapp, Edward
Knapp, Edward
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Publication Date
2023-05-24
Type
Thesis
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Abstract
Pasture-based feed systems offer significant economic benefits such as reduced feed costs and environmental impacts to farmers, but also pose agroclimatic and income risks. While grassland dairy farmers avoid the need to purchase grain-based concentrate feeds, their reliance on seasonal weather variations for feed and milk output offers its own challenges. This thesis evaluates important sources of economic uncertainty for dairy farmers while quantifying the opportunities for improved economic viability that would result from improved grass growth. This Irish case study is valuable as Irish farmers, like many others around the world, face the threats of competitive globalised markets and increased climatic volatility. These threats push farmers to improve economic and environmental efficiency in order to remain viable. The abolition of milk quotas has provided an avenue for farmers to seek economies of scale and boost the milk output of their enterprises. While increasing the input of grain-based concentrates is one method to boost milk production under land constraints, it comes with significantly higher feed costs. Grass based feeding is an alternative solution which reduces the need to purchase feeds produced outside the farm while simultaneously providing environmental benefits such as reduced lifecycle greenhouse gas emissions. In order for farmers and policy makers to embrace grass feeds the hazards and advantages of this feeding system must be quantified at the disaggregated level. This study uses three models to empirically analyse this problem: (a) a risk model that compares the income risk faced by dairy farmers with that of three alternative farm types; (b) a grass growth model that measures the impact of geoclimatic variables on localised grass growth conditions over time; (c) an international comparison model that compares the on farm profitability of the grass-based feed systems with granivore feed systems across six dairy producing nations in north-western Europe. Together these models illustrate an economic pathway towards resilient dairy farming.
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NUI Galway