‘Dairy farms are more competitive since quota abolition’

The abolition of milk quotas in 2015 was a turning point for the Irish dairy industry, according to Teagasc’s Dr. Pat Dillon.

The Head of Animal & Grassland Research and Innovation Programme at Teagasc Moorepark welcomed thousands of visitors to Moorepark ’17 today.

Dillon mapped the journey undertaken by Irish farmers between 2013 and 2016 and highlighted how farmers have improved during this period.

“Dairy farm numbers have remained static; there are about 18,000 farmers with more than 20 cows.

“Milk production, overall, has increased by 26%; we increased nationally from about 5.4 billion litres to 6.8 billion litres over that period. That’s a very significant increase in milk production.

“We have also increased cow numbers by 20%, we moved from 1.2 million dairy cows to about 1.34 million dairy cows.

“Over that period, believe it or not, milk production per cow has increased by about 6%; moving from about 365kg of milk solids / cow to 385kg of milk solids / cow,” he said.

The Teagasc programme head said that this increase in production was delivered through the breeding and nutritional programmes being utilised by Irish farmers.

Cost of production

On another positive note, Dillon said that there had also been a reduction in the cost of production witnessed at farm level over this period.

“The cost of production has reduced from somewhere around 27c/L on average in 2013 down to 22.5c/L in 2016.

“That’s a very positive thing for the dairy industry and that was vital last year in terms of a low milk price.

“Other countries that had planned for increased production also increased costs and, as a result, they saw significant reductions in milk production.

“We were able to increase milk production with the abolition of quotas and, at farm level, the level of debt is low compared to our corresponding competitive countries in terms of milk production.

Challenges and opportunities

Dillon added: “There will always be challenges and opportunities. As an industry, we have been very successful so far, but we have to further capitalise on increases in milk production.”

Challenges facing the Irish dairy industry:
  • Milk price volatility is going to be a continued feature going forward;
  • The availability of skilled labour is one of the issues that the industry needs to address;
  • Increased sustainability is a critical aspect in terms of exports;
  • Brexit: How we deal with this going forward.

On the opportunities that lie ahead, Dillon said that there is going to be continued demand for dairy products going forward.

“Demand is increasing by 1-2% per year and all forecasts say that this will continue to increase. There are opportunities there in the world market to increase production.

“That increased demand will come from developing regions like China, Asia and Africa.

He added that Ireland’s predominately grass-based system is a major strength. Recent research carried out in Moorepark has shown that the cheese and milk produced from grass-based cows is superior in terms of nutrition than cows managed under an indoor or confinement system.

“We have an advantage there and we need to capitalise on it,” he concluded.

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