The number of dairy farmers will fall by more than 2,000 to 15,500 by 2018 but the national dairy herd will increase to 1,382,000 cows by the same year, according to Teagasc's latest dairy industry projections.
The dairy roadmap to 2018 foresees an increase in the average herd size to 89 cows, while the average milk delivered per farm will increase to 458,123kg.
Ireland's national milk production will increase to 7,101m tonnes in 2018, which would be an increase of 39pc above 2008 or 43pc above 2009 levels.
The majority of this increase in milk production above 2009 levels will be produced in the southern half of the country.
In tandem with the rising numbers of dairy cows and heifers, the area of land devoted to dairy production will increase in the coming years. Teagasc expects an increasing number of beef and tillage farms to convert to dairying in the coming years, particularly following the removal of milk quota regulations.
While the medium-term outlook for international dairy product prices is good, Teagasc warns that the risk of increased price volatility will remain.
To cope with this problem, dairy farm businesses will have to move towards controlling their future by adopting farming systems that are insulated from market price volatility and external cost exposures.
Between now and 2018, the Nitrates Directive will require dairy farmers to refine their herd management and improve nutrient efficiency, but it should not unduly restrict efficient and innovative dairy farmers, Teagasc believes.
While cow numbers will have increased by 25pc during the decade between 2008 and 2018 and milk production per cow by 13pc, the greenhouse gas emissions per unit of milk production will actually be reduced over the same period.
Teagasc predicts numerous improvements in technical performance on farms between now and 2018.
Average herd EBI is expected to almost double from €75 now to €140 in 2018, while the concentrate fed per cow will be reduced from more than 1,040kg currently to 750kg in 2018.
Milk yield per cow is expected to increase from 4,661kg to 5,140kg in 2018, while milk solids will increase from 334kg to 378kg.
Calving interval will be reduced from 389 days currently to 380 days in 2018, while the mean calving date will be brought forward by six days from March 16 to March 10.