Oruna says it has found markets for extra milk
Despite Ireland increasing milk production by 14% in April and 10% in May, the country will not find it difficult to find markets for the extra dairy produce, according Mark Flaherty, economist with Ornua.
The challenge, he says, is to find markets which can return the best value to Irish farmers.
The increase in milk production seen in the last two months is in line with what has been expected, Flaherty said and he noted that it is what the industry has prepared for, for the last five years before quota abolition.
“While 14% sounds like a big number, but its totally in line with what the plans would have been.”
Flaherty said what has really been important over the last last five years has been the industry preparation in terms of building new markets.
He said that this has been really important in the context of the UK market this year. UK imports of Irish cheese were down for the first four months of 2015, but imports of Irish butter rose almost 50%.
“Our cheese exports to the UK are down about 10%. There is a lot product being produced domestically in the UK at the moment and so prices have obviously fallen in that market. For us the reduction in exports to UK market has been replaced by other markets we have in the Middle East and North Africa.
“Meanwhile in terms of butter, the percentage number often sounds big, however, when you convert it back into product it’s a small absolute amount.
“We have built so many markets in the last year that our extra production can easily find a home,” he said.
However, the challenge is finding the markets that return the best value to the Irish farmer in terms of supporting a strong milk price and profitable dairy farms.
“Its important to remember that Ireland has a 5.5 million milk pool. The increases that we are looking at are not massive in the global context.
We are only adding just a couple of thousand tonnes of product overall.
“The real challenge is finding the best value market,” he said.
Flaherty said the challenge is finding where Irish product will get the best price and what’s going to be the best return back to Irish farmers.
That is why Ornua’s focus has been on marketing Irish dairy product as a premium product and targeting high value markets, he said.