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.

European Union (EU) trade liberalisation policies will continue to push EU milk price downwards and necessitate increased efficiency and scale at farm and processing level to maintain profitability. In Ireland pasture‐based dairying, based on the efficient conversion of grazed grass into milk can be competitive within the EU. Continued technical innovation increasing animal performance from grazed grass, increasing herd genetic potential and developing labour efficient lower fixed cost systems will be essential. At processing level, increased efficiency in commodity processing, higher margin product development and the evolution of milk payment systems to reflect the true product value of supplies received will be required.

The resilience of family farming is an important feature of the structure of the farming industry in many countries, due largely to the 'smooth' succession of farms from one generation to the next. The stability of this structure is now threatened by the widening gap between the income expected from farming when compared with non-farming occupations in an economy like Ireland, operating at almost full employment. Nominated farm heirs are increasingly unlikely to choose full-time farming as their preferred occupation. To identify the factors that affect this occupational choice, a multinomial logit model is developed and applied to Irish data to examine the farm, economic and personal characteristics that influence a nominated heir's decision to enter farming as opposed to some non-farming occupation. The results show a significant negative relationship between higher education and the choice of full-time farming as an occupation. The interdependence between education and occupational choices is further explored using a bivariate probit model. The main findings are: the occupational choice and the decision to continue with higher education are made jointly; the nominated heirs on more profitable farms are less likely to pursue tertiary education and therefore more likely to enter full-time farming. The model developed is sufficiently general for studying the phenomenon of succession on farms.

Profitability and factors affecting grazing season length were econometrically analyzed using a representative sample of Irish dairy farms. The objective of this study was to explore what potential exists on Irish dairy farms to extend the grazing season and to quantify the possible economic benefits that result from lengthening the grazing season. Regression results indicate that location factors affect the length of the grazing season, but even when physical factors are controlled, farmer characteristics, such as education, also affect the grazing season length. The results of a panel data analysis show that significant cost reductions can be achieved by extending the grazing season. Overall, the findings indicate that lengthening the grazing season offers a cost-saving alternative on many Irish dairy farms, which could contribute to strengthening the competitiveness of the Irish dairy sector.

This article examines the effectiveness of a government funded extension programme. Farm‐level data are used to assess the economic impact of dairy discussion groups, a common participatory extension method. The evaluation focuses on whether discussion group participants have improved farm profits, which is estimated with an endogenous switching regression model. This method controls for self‐selection bias due to unobserved characteristics, such as the farmer’s ability, that may affect both participation and farm profitability. After controlling for this potential bias, we find that the economic returns to discussion group membership are positive, thus supporting government targets to enrol more farmers in discussion groups.