Milk quotas are a thing of the past and Pat Hickey says good riddance. The Kilkenny native maintains that the quota system stifled the entrepreneurial instincts of a generation of dairy farmers.
The Irish dairy industry has operated within an EU quota system since 1983. Volumes were fixed but the EU effectively provided a minimum price for milk through a complex system of intervention purchasing, export refunds, aids for storage and subsidies for industrial use.
Farmer milk prices were relatively stable, but this did not prevent a dramatic reduction in numbers of milk suppliers, with a drop from about 65,000 in 1983, to about 18,000 today.
But, since May of this year,the Irish dairy sector, farmers and processors, have the opportunity to pursue efficiencies through increased volumes and, hopefully. assert themselves on the world stage.
Farmers and their co-ops are gearing up for an increase in milk supply of the order of 50% by 2020 and they are making the investments necessary to produce and profitably process and market the milk.
Given that European population and their dairy consumption is largely stable, it is envisaged that the additional production will largely be targeted at the growing world market, particularly in Africa and Southeast Asia.
The challenge faced in these growing markets will be tough. Our international competitors, particularly those from the Southern hemisphere, benefit from low-cost milk production, on huge farms, processed in a massive scale.
However, Ireland’s efficient grass-based production system and the fact that we have a seasonality curve that almost exactly mirrors that of main competitors should allow us to trade profitably on those emerging markets.
Focussed on producing milk at a low cost, dairy farming is a 24 hour, seven days a week lifestyle for Kilkenny native Pat Hickey who, along with his brother John, milks 520 cows between two farms in Ardnacraney, Tang, Co.Westmeath and, Co. Roscommon.
For the first time in 31 years, there are no restrictions on how much milk dairy farmers can supply and the abolition of the milk quota came as music to his ears. He doesn’t subscribe to the theory that supply will exceed demand.
“I think it’s a great thing for the dairy industry and the country as a whole,” Pat revealed to Irish Tractor magazine. “The quotas destroyed a generation of farmers who started out in ’83 and, as a result, the best part of their farming lives were gone.
“It’s like everything else now, if people want to expand they can, if they don’t want to they don’t have to but at least they have that option now. There was no options before. I’d be very optimistic about the future. The negative outlook for milk prices is the main concern now but, hopefully, the price will turn around soon.”
One of six children, Pat was born and reared on the family farm in Freshford, Co Kilkenny and learned the tricks of the dairy trade from his father Paddy.
As an enthusiastic young farmer he decided to spread his wings back in 2005 and has made Westmeath his home since then along with his wife Elaine, who he married in 2007, and four children – Evan (3), Eva (3) and 18 week old twins, Paddy and John.
Tracing his roots, the large scale milk producer explained: “Dad had taken over the family farm from uncle and was milking 80 cows in ’83 when the quota was brought in so that slowed down any expansion plans he may have had.
“Myself and John were looking to expand and saw the farm in Ballymahon advertised. We purchased Ardnacraney in 2005, it came with 255 acres and a 2000 gallon with milk quota. The quota was readily available so that made it an attractive proposition.
“We then purchased the farm in Roscommon in October 2012. It was a complete green field site, we purchased 210 acres and are leasing an additional 110 from the previous owner. It’s good quality, dry land in Roscommon. We started building on site in June 2013 and commenced milking March 2014.
“We have 520 cows between both farms but with the land base we have we could milk in the region of 600 cows. We’d have to have the heifers on the ground to achieve that next year – if can get enough grass to feed them!”
With the help of three employees (Roscommon farm manager Brendan Elliott, Robert Swirez and Pat Burke), Pat and John have ambitious plans for the future growth of the two farms but what are challenges they encounter on a day-to-day basis?
“The milk price, as I said, is the big one at the moment and, after that, you have to keep the costs under control. We’re no different to a lot of people in that we are carrying fair bank commitments so we have to keep our cash flow in order.”
Pat Hickey
Ardnacraney
Tang
Ballymahon
Co. Westmeath
Taken from Irish Tractor & Agri magazine Vol 3 No 9, October 2015
