Only 50pc of dairy men set to expand post-quota
Just 50pc of dairy farmers intend to expand milk production between 2015 and 2020, as fears around the weather, higher input costs and price volatility hit farmer confidence.
These were the key findings from an in-depth study of farmer intentions that was commissioned by AIB and the IFA and carried out by Amárach Research and Broadmore Research.
The survey found that farmers were relatively optimistic about the future of the sector, with 25pc identifying the abolition of the quota system as the greatest opportunity for growth in the dairy sector.
However, this optimism was tempered by fears that increased volatility in prices and spiralling input costs would undermine margins.
Sixty per cent of the 200 farmers surveyed said they had increased milk output over the past three years, while 38pc had made no change.
The larger milk quota holders were the most likely to expand and they were also best placed to deal with price volatility.
Up to 88pc said that price volatility would be a feature of the dairy scene between 2015 and 2020, while 66pc said it would be a serious challenge up to 2015.
In the case of milk prices falling sharply, 43pc of farmers said they would seek to reduce overheads and costs.