IDB boss puts €850m cost on 2020 milk plan
Kevin Lane warns co-op boards on need for complete accountability in any proposed overhaul of dairy industry
The cost of expanding Irish milk output by 50pc over the next decade will be €850m, and will pose serious challenges for the entire sector, board members from the country's main co-ops have been warned.
Irish Dairy Board (IDB) chief executive Kevin Lane said the full cost of the proposed expansion, which is set out in the Food Harvest 2020 report, needed to be addressed.
Mr Lane also told delegates to the ICOS national conference, which was held in CityWest, Dublin, that moves towards dairy expansion should only be considered following a detailed analysis of likely future trends in milk price and returns to dairy farmers.
The IDB boss said growing milk production by 50pc would require a €400m investment in additional processing capacity.
In addition, he predicted that at least €250m would be needed in working capital, finance and the provision of facilities such as storage.
Moreover, developing routes to markets, supporting brands and the funding of acquisitions would cost a further €200m at least.
Mr Lane pointed out that the expansion proposal would necessitate the processing of a further 2.7bn litres of milk.
He said the limited demand for butter meant that annual cheese production would have to double to more than 300,000t, while whole milk powder (WMP) production would have to increase four-fold to 100,000t.