Dairy sector study shows productivity and scale concerns
Published 28/06/2011 | 05:00
The performance of Irish dairy farms lags behind that of its main competitors, according to a new study from Teagasc.
In key productivity indicators such as milk output per cow, per acre or per labour unit, Ireland consistently ranks below competitors such as Belgium, Denmark, Italy, Holland and Britain.
The researchers behind the study said that the poor results were 'worrying' for a sector hoping to be able to compete globally when quotas were dismantled in 2015.
They also pointed out that Irish dairy farms would struggle to compete within the EU in a situation where international dairy prices fell significantly.
Teagasc's economic researcher, Fiona Thorne, said that Irish prices will tend to drop more than some of its continental competitors because of the Irish dairy industry's dependence on low-value commodities.
As a result, even though Irish input costs were lower than many of its competitors, dairy farmers here will find their overall profitability and ability to compete slip.
The research also highlighted the vulnerability of farms with fewer than 50 cows.
"The average-sized Irish dairy farm had one of the highest total economic costs per kilogramme of milk produced for the years 2008-2010, with only the average and small typical farms in Poland and northeast US experiencing higher costs," the report stated.