The global dairy industry needs to reappraise the systems of milk production that are operated at farm level with specific focus on enhancing technical efficiency and competitiveness of the sector. The objective of this study was to quantify the factors associated with costs of production, profitability, and pasture use, and the effects of pasture use on financial performance of dairy farms using an internationally recognized representative database over an 8-yr period (2008 to 2015) on pasture-based systems. To examine the associated effects of several farm system and management variables on specific performance measures, a series of multiple regression models were developed. Factors evaluated included pasture use [kg of dry matter/ha and stocking rate (livestock units/ha)], grazing season length, breeding season length, milk recording, herd size, dairy farm size (ha), farmer age, discussion group membership, proportion of purchased feed, protein %, fat %, kg of milk fat and protein per cow, kg of milk fat and protein per hectare, and capital investment in machinery, livestock, and buildings. Multiple regression analysis demonstrated costs of production per hectare differed by year, geographical location, soil type, level of pasture use, proportion of purchased feed, protein %, kg of fat and protein per cow, dairy farm size, breeding season length, and capital investment in machinery, livestock, and buildings per cow. The results of the analysis revealed that farm net profit per hectare was associated with pasture use per hectare, year, location, soil type, grazing season length, proportion of purchased feed, protein %, kg of fat and protein per cow, dairy farm size, and capital investment in machinery and buildings per cow. Pasture use per hectare was associated with year, location, soil type, stocking rate, dairy farm size, fat %, protein %, kg of fat and protein per cow, farmer age, capital investment in machinery and buildings per cow, breeding season length, and discussion group membership. On average, over the 8-yr period, each additional tonne of pasture dry matter used increased gross profit by €278 and net profit by €173 on dairy farms. Conversely, a 10% increase in the proportion of purchased feed in the diet resulted in a reduction in net profit per hectare by €97 and net profit by €207 per tonne of fat and protein. Results from this study, albeit in a quota limited environment, have demonstrated that the profitability of pasture-based dairy systems is significantly associated with the proportion of pasture used at the farm level, being cognizant of the levels of purchased feed.
A resilient dairy business will be sustainable across all of the sustainability indicators, survive milk-price drops and be very profitable when milk price is high. The term resilient means able to ‘recover, respond, deal or withstand’ different internal and external challenges that may manifest themselves within the farm business from time to time. There is significant potential to increase efficiency and productivity at farm level when compared with the average farm nationally. The focus at a farm level must be about increasing grass growth and utilisation and converting that feed to milk solids (kg of milk fat and protein) sales at as low a cost as possible. Increasing labour efficiency by operating more streamlined work practices, using contractors and contract rearing of heifers will have a major impact on farm labour requirements.
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