Ireland is set to become the fastest-growing dairy economy before 2013, according to the Irish Dairy Board in its latest monthly report.

Post-2015 milk quota removals will pave the way for innovation and investment as farmers will maximise grass-based milk production systems. No longer restrained by milk quotas, Irish milk needs to be targeting dairy demand areas that have been accessed by New Zealand and Australia while EU production has been restricted, the report stated.

Irish expansion will be driven through product innovation and adding value, and will mark a big shift from the largely ‘static’ milk production seen across the EU since 2003, it added.

The report also noted growing concern over the transition into a more open market. Through the Nineties and into the new millennium, up to half of key dairy commodities were sold into intervention. This puts Ireland at a disadvantage, according to Dairy Ireland analysts, who said Holland and Denmark sold less than 25 per cent of key commodities into subsidised markets during this period.

Russia is the biggest importer of both butter and cheese in the world and China is catching up. Last year Chinese dairy imports rose to 1.3 million tonnes with cheese imports increasing by over a third.

Now the world’s largest importer of milk powders, China heads a group of six key countries for milk powder imports consisting of Indonesia, Algeria in second, the Philippines, Mexico and Brazil.

However, the Association stated that tapping into these markets represents a challenge because of the already established global presence of New Zealand and the US.

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