Farm Ireland

Sunday 17 December 2017

Global analyst: Target is ambitious but not impossible

Marina Rebello sees expansion potential in Ireland
Marina Rebello sees expansion potential in Ireland

Marina Rebello, Rabobank International

"The 2020 Report is ambitious and not impossible.

"Rabobank sees Ireland having one of the highest expansion potentials in Europe. This is because of the availability of land, water, animal feed and one of the lowest cost bases in the EU.

"Traditional cheap supply regions such as New Zealand, California and Brazil will not be able to cope with the increase in global demand over the coming years.

"So world importers such from Asia, India, Africa and Russia will be turning to Europe and the US for extra supplies. As a result, we expect price to trade at somewhere above average 2006 levels.

"A big issue here is your fragmented processing industry. In order to capture some of the global growth, the 25 companies processing just over five billion litres need to be streamlined. In comparison, the Netherlands, there are only 20 companies processing over 11 billion litres. Ireland also needs to start planning a strategy for selling the milk.

"Everybody here is talking about WMP but you cannot do it cheaper than New Zealand. Is there a smarter way to process your product?

"There are possibilities in value-added products such as infant formula and you have a great position in that market.

"You should also bear in mind that not all commodities are equal. Anyone and everyone can make WMP.

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"What about milk protein concentrates? Or whey powder ingredients?

"Ireland has a great starting position but action is needed!"

Irish Independent