20 October 2025

Dairy costs: What sets the bottom and top performing farms apart

The recently released Teagasc National Farm Survey 2024 Dairy Enterprise Factsheet offers a useful snapshot of how Irish dairy farms performed last year. What’s interesting however is how it highlights the financial differences between the top, middle and bottom performing farms.

For the analysis conducted by the Agricultural Economics and Farm Surveys Department at Teagasc, farms were divided into three groups – top third, middle third and bottom third – to allow for the differentiation of key performance indicators across the three cohorts.

From this exercise, a noticeable gap in cost structures was observed with bottom-performing farms typically spending more on inputs on a c/L basis. This group also had lower gross output and higher total costs, resulting in significantly lower net margins per litre of milk produced.

The Teagasc NFS factsheet also delves into concentrate usage and costs at farm level, with the average concentrate fed per dairy cow increasing by 11% to 1,358kg in 2024. While the average concentrate use has increased, especially on more heavily stocked farms, spending on feed per litre actually dropped in 2024 for both the top and bottom groups. Despite this, the bottom third still had the highest concentrate feed costs, along with the highest pasture and forage expenses on a c/L basis.

Labour costs on a c/L basis, on the other hand, were highest among the top-performing farms, which tend to operate at a higher output level.

The total cost gap between the top and bottom groups was nearly 3.5c/L, while the difference in output value, occurring mainly due to variations in fat and protein levels, was close to 3c/L.

As a result of the above, the net margins generated on a c/L basis across the three cohorts varied significantly in 2024; top farms averaged 20.15c/L, compared to 18.19c/L for the middle group and 13.92c/L for the bottom third.

Table 1: Output, costs and net margin Top, Middle and Bottom thirds 2024: Dairy Farms (Source: NFS)

	Top	Middle	Bottom	Average
cent per litre
Gross output	54.36	52.74	51.62	52.90
Concentrate feeds	8.21	8.57	9.55	8.78
Pasture and forage	5.79	6.12	7.67	6.53
Other direct costs	5.14	5.40	5.68	5.41
Total direct costs	19.14	20.09	22.90	20.72
Energy and fuel	2.63	2.81	3.61	3.02
Hired labour	1.75	0.92	0.43	1.03
Rent / leasing of land	1.62	1.58	1.39	1.53
Machinery depreciation	2.61	2.60	2.60	2.60
Buildings depreciation	1.62	1.72	1.52	1.62
Remaining fixed costs	5.04	5.02	5.30	5.13
Total fixed costs	15.27	14.65	14.85	14.93
Total costs	34.21	34.55	37.70	35.50
Net margin	20.15	18.19	13.92	17.40

The Teagasc National Farm Survey 2024 Dairy Enterprise Factsheet also shows how output and gross margin per hectare varied across the three groups. While stocking rates for the top and middle groups actually declined in 2024 (with no change in the bottom group), gross margins still increased by €1,351/ha for the top farms, €976/ha for the middle and €684/ha for the bottom. There were also clear differences in stocking rates, milk production per hectare and direct costs across all three groups.

Table 2: Output and gross margin for top, middle and bottom one-thirds 2024: Dairy Farms (Source: NFS)

		Top	Middle	Bottom	Average
Stocking rate	Cows per hectare	2.41	2.04	1.75	2.07
Milk production*	Litres per hectare	14,728	11,331	8,070	11,364
Concentrates fed	Kg per cow	1,464	1,382	1,229	1,358
Concentrates fed	kg per litre milk produced	0.24	0.24	0.26	0.25
Gross output	€ per hectare	7,999	5,962	4,1112	6,017
Direct costs	€ per hectare	2,843	2,309	1,841	2,329
Gross margin	€ per hectare	5,156	3,653	2,271	3,688

For more insights, view the Teagasc National Farm Survey 2024 Dairy Enterprise Factsheet (PDF) here.