Dairy

Overview

In 2015, milk quotas will disappear and the Irish dairy sector, farmers and processors, will be given 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, our efficient grass-based production system, enthusiastic young farmers 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.

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.

To learn more about setting up a co-operative please go to Starting a Co-operative.