The retention of milk quota ring fencing and the current quota trading system will be essential if Ireland is to achieve the 50pc growth in milk production set out in the Food Harvest 2020 report, Lakeland Dairies chief executive Michael Hanley has claimed.
The expansion in output would have to be achieved on a sustainable basis that ensured profitability both for dairy farmers and their processing co-operatives, the Lakeland boss said.
While there have been calls in some quarters for the removal of milk quota ring fencing to allow production capacity to move freely, Mr Hanley insisted that this would not be in the best interests of the industry.
"To ensure that our dairy farmers have the best prospects for growth and development, it is essential that the present quota trading system and quota ring fencing will remain in place until 2015," Mr Hanley said.
Realising the Food Harvest targets would also require maximum efficiency in dairy processing, selling and marketing, he added.
Mr Hanley expects the medium-to long- term prospects for world dairy markets to remain reasonably good. He predicted that Irish milk prices would remain stable within current price ranges during 2011.
"The medium- and long-term prospects for world dairy markets remain reasonably good. The increased competitiveness of Irish exports from the fall in value of the euro is welcome," Mr Hanley said.
"While supplies from dairy producing countries have increased on the back of recent price rises, the continuing increase in demand from developing markets such as Russia, China, India and the Middle East has helped to keep price levels up. Market analysts predict an annual growth rate of 2.8pc in global demand for dairy products up to 2014 at least," he pointed out.
Mr Hanley said Lakeland would be focusing on the higher value added aspects of its business and particularly on "innovative foodservice products".
"We recently launched a range of new flavoured milk products into the UK market following extensive research and development," he explained.
Meanwhile, one in five babies in the world will be fed on Irish-produced infant milk formula when the new €50m investment by Danone Baby Nutrition comes on stream in Cork, according to the Minister for Enterprise, Trade and Innovation, Batt O'Keeffe.
Minister O'Keeffe said one in seven babies worldwide were currently being fed on Irish-produced infant milk formula.
"That will rise to one in five after the new Danone investment in Macroom, which is supported by the Government through Enterprise Ireland, begins commercial operations in the first half of 2012," Minister O'Keeffe said.