“Cautiously optimistic” for 2024, was how David Kennedy, head of dairy with Bord Bia, described the outlook for dairy markets.

2022 was a year of record prices for dairy, which was followed by year of reduced farm gate prices – while input cost remained high.

A drop in global supplies means that the outlook for 2024 is more positive, however, Kennedy noted that there are a number of challenges facing the Irish dairy sector in the years ahead.


2023 will be remembered as a challenging year for dairy farmers, with market returns for dairy products dropping due to over supply of products.

Kennedy said that high prices globally in 2022, meant that in Q3 and Q4 there was a lot of product produced.

David Kennedy, head of dairy with Bord Bia
Image source: Bord Bia

“You want consumers to consume that product, but they are being challenged heavily by the cost of living crisis, energy inflation, and not just food inflation – but inflation across the board.

“So you have expensive food out there, and less money in peoples’ pockets to consume it, so there was a bit of bottle neck in the first and second quarter of 2023,” he said.

Kennedy said: “If you look at 2022, European butter prices averaged just below €7,000 in the second half of the year, and €6,500 for the first half – which is well above average annual figures.

“For this year, you are looking at that figure being a full year of €4,800 – that is a massive drop back.

“If you spoke to most dairy processors and dairy farmers, what you would prefer is something in-between, the highs of 2022 and the lows of 2023 make it very, very tough.

“What you’d love to see in 2024, is a return to more normalised trading behaviour, where product is profitable at farm level and profitable at consumer level as well.”


Although Ireland represent around 1% of global dairy production, Irish dairy does represent around 11% of the globally traded milk – with continued growth of markets important.

“It is very important to have a multiple of markets at-play, because what you will find is there is different trends for different products in different markets.

“For the moment the US, UK and European Union are our best home for butter and cheese, your fat-based products, and they are likely to continue to be so.

“It is very important to have those markets going well, because we have a big consumer presence, very strong understanding of quality, very strong understanding and desire for sustainability in those markets – so they are super important,” Kennedy said.

FAO dairy imports

Continuing, he said: “You can’t produce butter and cheese without skim and whey, so you need markets for those secondary powder-based products.

“The trick really is to have the right home for the right product, at the right time.

“We have seen, because it is a global commodity decline – we expect to see all international destinations decline from a value perspective in 2023, however, there are some pockets of performance.

“Markets that were less viable in 2022 because of the high cost are coming back into play, so places like Algeria, who are very price conscious.

“Came back in taking a lot of volume for Europe and Ireland in 2023, the high prices are one thing, but you have to have product trading at levels that is appropriate for the market – we need good homes for skim to counter our good homes for butter.

“It is important to have the mix right.”

Bord Bia

Southeast Asia offers a significant opportunity for growing Irish agricultural exports, with Bord Bia leading a trade mission to region every non-Covid year since 2016.

Kennedy said: “They are markets with huge populations already, huge population projections and low self-sufficiency from a dairy perspective.

“If you look at head room for group globally, from affordability and demographic perspective, Southeast Asia, and Asia in general is where it is at.

“In Asia, we are newer to the market, so we have a different job to do there.

“The job we are now doing there now, is creating that reputation for Ireland, so we are positioning Ireland as this really high-quality, grass-fed dairy – the perfect counter balance to your supply from Oceanica and North America.

“The grass-fed piece is a new concept to the Asian market, and probably not the first message we will put there, but it is certainly part of the message, and allows them to understand our production system.

“It is really a science sell, it’s a technical sell, it’s an innovation sell – there is loads of work to be done there,” he said.


Kennedy said that there is huge potential for Ireland to become the source of dairy for large multinationals looking to boost their sustainability claims, but there is a big asterisk beside this.

“The big asterisk is when Ireland creates headlines around water quality or animal welfare, those headlines are picked up internationally.

“Our overseas teams will regularly be fielding queries from international customers who have read the headlines in Irish media or dairy specialist media – that gives them some nervousness around sourcing from Ireland.

“We have done an awful lot of hard work, but there is a lot more to be done to navigate those reputational risks that are in front of us – practically around water, nitrates derogation and animal welfare.”

Kennedy noted that the current milk pool is almost 9 billion litres, with projection showing a growth to 9.3 billion litres by 2030 – a significantly slower growth than what has occurred within the Irish dairy sector during the last ten years.

He believes that demand for sustainable dairy ingredients can come from within the existing milk pool, but by getting more from what is it in there.

“If you look at the era that Irish dairy is in now, we have come from a quota era, which saw limited production and limited incentive to invest on farm or invest in processing.

“Into ten years of significant growth, with Irish farmers doubling down and investing in their farms, investing in their herds, investing in their infrastructure – processors did the same.

“It was a race to make sure we could process everything, now there is a bit of breathing space – we have the stainless steel, we have the farms – how can we get more from what we have?

“There is plenty of product there for those customers, it is about getting more value for the product that is there, rather than creating more volume.”


Commenting on the outlook for Irish dairy in 2024, Kennedy said: “From a markets perspective I would be cautiously optimistic, where going into 2024 with lower global stock holdings – the stock that is there is more affordable which is a positive.

“At farm level, there is plenty of head winds to be dealt with, plenty of challenges coming into the spring around calf welfare.

“The Irish dairy industry has shown it reliance every single year, it get knocked down and just gets on with it.

“I think 2023 was as tough as you’d get from a price perspective, from a weather perspective and Irish dairy farmers have gotten through it.

“I would hope that 2024 would seen a more positive pricing outlook for those dairy farmers, but the big asterisk is can we continue water quality and calf piece.”