The number of liquid milk producers in the country has fallen by 37% or 688 farmers in the past decade, according to the National Milk Agency.
The agency’s annual report reveals that the number of registered milk supply contracts in 2022/23 decreased to 1,228, a decrease of 58 contracts or 5% on the previous year.
In the current 2023/24 milk year, a further 49 producers have exited, bringing the total number of registered producers to 1,179.
Since the establishment of the agency the number of registered contracts has reduced by 65% from 3,344 in 1995.
The data shows that last year the number of All Year Round (AYR) contracts decreased by 51 to 1,102 while the number of winter contracts decreased by 7 to 126.
The difference in 2023 between the national average liquid (43.45c/L) and manufacturing prices, based on an equal solids content, was an estimated 2.73c/L, compared to 2.09c/L in the previous year.
Liquid milk
Denis Murphy, chair of the National Milk Agency, said that the agency is concerned by the “continuing decline in the number of registered producers and in their annual milk supplies”.
“Many traditional long-term registered producers are exiting the fresh milk supply chain and are not being replaced,” he said.
Murphy said that many suppliers are “reviewing the economic benefit of producing all-year-round supplies of milk for the domestic fresh milk market”.
He added that the agency is also worried about the impact of nitrates changes on liquid milk suppliers.
“Stocking rates per hectare are a key driver of profitability in Ireland’s pasture based system of milk production.
“Given this reduction in stocking rates under the nitrates derogation many registered producers are reviewing the sustainability of their all-year-round milk supply business model,” Murphy said.
“Generational succession, lifestyle changes and labour availability are further factors which confront the all-year-round milk supply model in a sector where seasonal milk production is the norm,” he added.
Domestic supplies
The annual report outlined that domestic milk supplies to creameries and pasteurisers in 2023 were 8,459 million litres, which is a decrease of 366 million litres or 4% on 2022.
This was the first decrease in domestic milk supplies since EU milk quotas were abolished in 2015, the agency said.
Milk supplies fell in every month in 2023, except February, with a dramatic fall of 19% in the winter months of October to December 2023, compared with the same period in 2022.
95% of domestic milk supplies were utilised in the manufacture of dairy products, which were mainly for export, while 5% of supplies were processed for liquid consumption on the domestic market.
According to the National Milk Agency, the fresh milk market had an estimated retail value of €664 million in 2023.
National consumption of fresh milk last year was 572 million litres, an increase of 5 million litres or 1% on the previous year.
Irish consumers have one of the highest annual per capita consumptions of fresh milk in the world, at 112 litres.
Sales of whole milk represented 64% of fresh milk sales, while sales of low-fat and skimmed milk represented 36% of sales.
The annual report noted that the market share of domestic producers and processors declined to 71% in 2023.
Finances
In 2023, the National Milk Agency’s milk levy income of €467,887 decreased by €4,909 or 1%.
The annual report shows that operating costs fell by 4% to €528,412 over the 12 months, with personnel and staff related costs down 7% to €373,662.
The excess of costs (€528,412) over income (€467,887) resulted in a deficit for the year of €60,525, compared with a deficit of €78,118 in 2022.
The negative cash flow of €54,701 from operating activities and capital expenditure decreased the agency’s cash balance to €729,166.