Comparison of the physical and financial performance of organic dairy farming systems (OF0146)

Summary

This is the final report from Defra project OF0146
Two different systems of organic milk production were studied during the 1998-2002 period. The systems were established at the IGER Ty Gwyn organic dairy farm during the 1998/99 period. The systems were based either on achieving self-sufficiency in both home-grown forage and concentrate feeds or on the production of home-grown forage and the purchase of concentrate feeds. The data collected included recording the changes in the soil indices, level of crop production, crop quality, level of milk production, milk quality, animal health and herd reproductive performance of the two systems.
The main attached report starts with a detailed executive summary.
In the modelling work fifty-four different strategies for organic dairy production were evaluated. Performance data from three commercial organic dairy farms with different climatic conditions (Devon, Pembrokeshire and Shropshire) and cropping strategies (arable with all home-grown feed, home-grown forage only, home-grown forage + purchased concentrates) and also data from the two Ty Gwyn systems was inputted into three models (SAC Dairy Systems, SAC FeedByte, IRS OrgPlan) to evaluate the potential performance from different organic systems. The results produced a range of different options and rankings in relation to their potential financial performance and use of resources. The results from the data modelling predicted the best financial performance and utilisation of resources would be achieved by the establishment of an arable system on the Pembrokeshire farm. The lowest financial performance was predicted to be from the establishment of purchased concentrate systems on the Shropshire and Pembrokeshire farms, with the poorest utilisation of resource use indicators from both the establishment of a forage-only system on the Shropshire farm and purchased feed systems on both the Shropshire and Pembrokeshire farms. In relation to financial indicators the modelling work showed little difference between the two Ty Gwyn systems.
The financial performance of Ty Gwyn was compared with ten commercial organic dairy farms, monitored during the 1998-2002 period. Of the ten commercial farms, four had been organic for a number of years, three were recently converted and three were in conversion. The net farm income of the Ty Gwyn SS system increased from 1998/99 to 1999/00 to a peak of £25,453 but then declined sharply following a fall in the price paid for organic milk to a loss of -£14,269 in 2001/02. In the Ty Gwyn PC system the net farm income increased to £24,122 in 2000/01 but then fell sharply to a loss of -£4,825 in 2001/02. The peak net farm incomes on the commercial farms were recorded in the 1999/00 period, with either a small loss (<-£50/ha) recorded on the well established farms or a small profit (<£50/ha) on the recently converted farms in 2001/02.