‘Irish dairy farmers fortunate that the outcome of 2016 was not worse’
Irish dairy farmers have maintained or increased their competitiveness since the abolition of milk quotas eighteen months ago, Teagasc's Pat Dillon of Moorepark Research Centre told over 300 dairy farmers at the Teagasc National Dairy Conference at the Rochestown Park Hotel, Cork today.
Mr Dillon said that production costs have been reduced on Irish farms as a result of the greater output, but further significant gains "are still to be obtained in grass utilisation on dairy farms" which will deliver significant financial benefits to producers.
"The large increase in milk production in Ireland forecasted with the abolition of milk quotas has materialised. This has been associated with an increase in herd size as well as an increase in milk yields per cow" he said.
"In the first year after milk production abolition milk production increased by almost 19% in Ireland while the increase in the EU 28 was 4.2%, in USA 2.4% but deceased by 1.5% in New Zealand", he added.
He pointed out that the corresponding increase in demand over the period had been lower than predicted due to the lower than expected demand from China, low oil prices and Russia remaining largely out of the market.
"This provided the perfect storm in terms of global dairy commodity prices with milk prices bottoming out in June 2016, before significant correction to the supply-demand imbalance in the second half", he said.
He stressed that "minimising costs should be an important objective" and if Ireland is to secure a greater share of the world market in the future "the competitiveness of the sector will be crucial".
"In the future dairy farmers will be required to develop systems of milk production capable of delivering sustainable returns within a volatile milk price scenario. In Ireland this will be best achieved through the development of low cost grass base systems of milk production", he said.