Farm Ireland
Independent.ie

Sunday 25 June 2017

Prospect of big processing bill a 'red herring'

John Shirley

The threat that Irish dairy farmers will be hit with a big processing bill arising from a post-quota surge in milk output has been described as a "red herring" by Teagasc Moorepark's Laurence Shalloo.

Speaking last week at the Irish Grassland Association conference on 'Planning for Post Quotas', Dr Shalloo said that a regime of expansion must be managed as part of an integrated plan.

"There is major scope for efficiencies in Irish processing, and expansion itself will bring efficiency," he said.

He suggested that the investment cost of processing extra peak milk should be of the order of 14c/l or about 1.5c/l per year amortised over 10 years.

"Any off-farm investment for milk expansion will be marginal compared to the on farm cost," Dr Shalloo said.

Shares

"New Zealand farmers investing in extra processing were given valuable shares in their Fonterra Co-op.

"The fractured Irish industry does not offer the same facility," he added.

He made his remarks in a paper entitled 'Milk Quota Management 2011 to 2015'.

In this, he concluded that a superlevy could be a factor as we approach the quota cut-off year of 2015.

Dr Shalloo said that cutting back concentrate feeding was the first option for herdowners threatened with a superlevy and that once-a-day milking was also an option.

Indo Farming