An Examination of the Volatile Nature of Grass Production in Ireland

Abstract

Grass production provides Irish dairy farmers with a competitive advantage over many of their mainland European counterparts by providing a cheap feed source. The temperate climate in Ireland favours the production of grass, however production is highly seasonal with little growth over the winter period. This seasonal pattern of grass production in turn has resulted in predominantly spring calving dairy herds and has limited the development of the dairy product portfolio in Ireland which has created a reliance on dairy commodities. As Ireland exports approximately 80% of its dairy output, recent substantial increases in market price volatility has resulted in increased price volatility at farm level. The increased price volatility at market and farm level has been well documented; however the volatility of farm inputs has received little attention to date. In this paper the seasonal and volatile nature of grass production is presented and compared with other Irish crops. As Irish dairy and beef farmers expand production in the post quota environment the optimal use of grass as a feed source will be central to their competitive position. The volatile nature of this resource will require improved pasture management along with improved risk management tools. A number of possible tools are discussed in the latter part of this paper.