Dairygold has completed its Milk Supplier Census for the period 2025-2030 which reveals the trend of milk production growth flattening.
This is the fourth major Milk Supplier Census the society has conducted since milk forecasting was introduced in 2012.
Like previous censuses, the results will lay the basis for Dairygold’s strategic planning for the next five-year period, including the decisions needed to support members’ milk production and deliver sustainable growth for Dairygold.
ifac was commissioned to carry out the census between September 2, 2024 and October 4, 2024 with 94% of Dairygold’s milk suppliers responding.
Milk production
Since the last Census in 2020, Dairygold has said that the policy landscape has changed significantly.
The government’s 2030 target for a 25% reduction in agricultural emissions, and concern about the retention of the nitrates derogation, have changed the operating environment for both dairy farmers and processors.
The census confirmed the nationwide trend of milk production growth flattening, with Dairygold milk suppliers forecasting annual milk production volumes for the next six years stabilising at 1.38 billion litres.
When factoring in a 1% annual increase in output per cow, the projected supply would be 1.46 billion litres. The average Dairygold milk production volume over the last three years (2021, 2022, 2023) was 1.46 billion litres.
The combination of milk suppliers indicating plans to cease dairy farming or reduce cow numbers is partially offset by other respondents’ plans to increase cow numbers, according to the census data.
The forecast does not take account of the impact any new entrants would have on milk production, over the same period.
Uncertainty around environmental issues (52%) is an important factor impacting milk production, followed by land availability and stocking rate (37%).
Ireland’s nitrates derogation allows farmers to farm at higher stocking rates, above 170kg livestock manure nitrogen/ha up to 250kg N/ha, subject to conditions aimed at protecting the environment.
The loss of the nitrates derogation was identified as the key risk to milk supply. Reducing cow numbers, decreasing non-dairy livestock and increasing land area were the top three actions milk suppliers would take, should the derogation no longer be available.
Despite these actions, the loss of the derogation would still have significant economic impact on both milk suppliers and the Dairygold business.
Age and workload are also factors influencing suppliers’ decisions to reduce or cease milk production, with most of these milk suppliers intending to transition to another farming enterprise, post-dairying.
While the above factors inevitably shape the milk production forecast for the next six years, over half (51%) of respondents are positive or very positive about the future of milk production on their farm and more than four in five (84%) reported they will either maintain or increase their output over the next five years.
Commenting on the census results, Dairygold chief executive, Michael Harte said: “Regularly surveying our milk suppliers to understand the issues impacting their farm enterprises and their plans for the future is important to allowing Dairygold develop appropriate plans for the business.
“I want to thank all milk suppliers for taking the time to complete the census. The results will now inform our strategy for milk operations and commercial planning for the next six years, including the decisions needed to deliver sustainable growth for milk suppliers and the society.
“The census confirmed that the greatest risk to milk supply is the nitrates derogation and continued government support for the industry on this issue is imperative for the future economic livelihood of Dairygold milk suppliers and the Dairygold business.”
Census – other on-farm challenges
Suppliers also rated succession, financial awareness and access to employees as being key challenges for them over the next six years.
Only 15% of those surveyed have a clear succession plan in place, echoing the findings of another ifac report in January of this year, which found that 94% of farmers found farm succession planning a significant challenge.
Milk suppliers’ understanding of their exact cost of production remains a challenge, along with finding non-family employees to work on the farm, with respondents in this position reporting limited availability of employees and the costs associated with employing someone as key issues.
Investment
Farm infrastructure (57%) is the most common planned investment for Dairygold milk suppliers over the next six years, with slurry and/or soiled water storage (31%), as well as energy saving measures (30%) also rating highly on the list of priorities.
Environment
The survey responses also demonstrated the strong commitment among Dairygold milk suppliers to taking environmental and sustainability measures on their farm, with over 98% responding that they have taken action on their farm to make their enterprises more sustainable.
Dairygold chairperson, Seán O’Brien added: “As a cooperative, our focus is on making sure that we support economic and sustainable farming enterprises.
“The census allows us to listen to the views of our milk suppliers, so that we can continue to support their farming enterprises.
“The big challenge is the nitrates derogation, where we will also need strong government support, to ensure that it won’t be an issue that impacts the future economic livelihood of our milk suppliers and the Dairygold business.
“To build on the insights gathered by this census and to ensure that our next steps are fully informed, we intend to conduct a number of focus groups with our milk suppliers in early January, to get a better understanding of some of the topics our milk suppliers have raised in the census.”