Farm Ireland

Thursday 19 April 2018

Milk chiefs reject fears over drop in supplies

Caitriona Murphy

Caitriona Murphy

Dairy industry sources have dismissed fears that falling milk supplies could undermine the Irish processing sector.

Department of Agriculture officials are expected to confirm that Ireland fell short of quota by a massive 10pc during the 2009/2010 quota year.

Concern had been expressed by secondary processors about the supply integrity of dairy ingredients as milk supplies continue to slump.

Milk supplies for the quota year just ended are expected to total around 4.76bn litres. This is around 340m litres back on the 2007/08 quota year and more than 230m litres down on 2008/09.

However, dairy experts have dismissed the suggestion that falling deliveries are a future trend.

Michael Barry, director of the Irish Dairy Industries Association (IDIA), said the current milk supply undershoot was simply a symptom of the 2009 dairy market.

"Farmers and processors got a roasting last year and they are still under stress and trying to organise finance," he explained.

"We went through a huge peak and trough without any assistance," he said.

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"In fact, we were in the trough for a good while without any help."

Mr Barry insisted that supplies of dairy ingredients to secondary processors could be replaced relatively easily in the event of any intermittent shortfall.

"This shortfall was well-flagged and dairy products are very tradeable on the European market," he said.

Town of Monaghan chief executive Vincent Gilhawley insisted primary processors would have enough milk to meet all their contract requirements.

"The situation is not that extreme. We will have enough for contracts," he maintained.

Mr Gilhawley dismissed the suggestion that lower milk supplies in 2009/10 were indicative of a longer term trend.

"A large part of the shortfall was weather-driven. Poor milk price last year was also a factor but I suspect weather is the bigger factor," he said.

The co-op chief pointed to the recent quota trading scheme as a positive indicator for future milk supplies.


"Look at the number of people prepared to buy quota, even though its very difficult to see quota mattering in 2010/11," he said. "These are positive indications at farm level."

However, ICMSA president Jackie Cahill warned that milk production would depend on the price paid to farmers.

"If the price was right I'd be reasonably confident we'd fill our quota. Farmers would be willing to feed cows and drive on production through the back-end of the year. But it will all come down to price," Mr Cahill maintained.

Meanwhile, Glanbia has confirmed that it was running 6.3pc or 69m litres under quota on March 27, while Premier Dairies was running 4.9pc, or 14.3m litres under on the same date.

Lakeland Dairies was running 13pc under quota at the end of February, with little change expected during the final month of the quota year.

Dairygold milk supplies were running 8pc below 2009 levels and the co-op expects to finish at 7.5pc under quota.

Irish Independent