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Carbery boss warns estimates on spare capacity are too low

Spare milk processing capacity at peak could be as low as 15pc and much of this was located away from where it was needed, the IFA's Dairy 2020 milk conference was told last week.

Carbery CEO Dan McSweeney maintained that estimates of 30pc spare processing capacity at peak were well off the mark.

Mr McSweeney told delegates at the Citywest conference that the location of this spare capacity was also problematic. He pointed out that the bulk of it was located away from where it was needed in the south and east of the country.

He said there would be a necessity for an increased investment in stainless steel if Ireland was to hit the 50pc expansion in milk production set out in the Food Harvest 2020 report.

The road map for that expansion was set out last week with the publication by the Department of Agriculture of a 55-point action plan from the Dairy Expansion Activation Group.

Speaking at the IFA conference, Dr Sean Brady of the activation group warned that the action plan would need to be pushed by those involved in the sector.

The plan aims to work at four levels: the identification of markets, milk processing efficiency, on-farm production and general agricultural strategy.

Kevin Lane of the Irish Dairy Board (IDB) pointed out that there was good potential for sales growth in Russia, China and other parts of Asia and Africa.

Ruled out

He ruled out any involvement by the IDB in milk processing, arguing that the next 10 years were likely to be among the busiest in the board's 50-year history.

Mr Lane said the IDB's focus would remain on developing a route to markets for Irish dairy produce and maximising returns for Irish farmers. He said the IDB would consider tie-ups with New Zealand dairy giant Fonterra in the future, as long as the company could retain its independent route to markets.

The IDB boss said the board had also had talks with Friesland Campina with a view to possible collaboration.

On the processing front, the incoming ICOS boss, Tom O'Callaghan, said the first phase of the KPMG analysis of the sector would be finished by March.

Meanwhile, Glanbia boss John Maloney said the company would be assessing its available milk processing capacity over the coming months, with that process informed by the dairy's requirements up to 2015.

He told the conference that Glanbia would figure out its processing requirements by the end of the year, whether that was "on their own" or "with others".

In terms of on-farm production, Pat Dillon of Teagasc Moorepark said the only viable option for farmers was to maximise production off grass.

Mr Dillon said that going down the route of all-year calving was not realistic since the extra costs could not be recouped from the market.

The Moorepark head said farmers should aim to pull the mean calving date back from the current date of March 14 to February 15.

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