Irish milk prices will be below cost of production levels during the early months of 2016, according to Ulster Bank’s Senior Agricultural Manager, Ailish Byrne.
“But we remain committed to the industry, believing that the prospects for Irish dairy remain extremely positive.
“Over the past six years, the milk sector has experienced the market downturn of 2009 and the fodder crisis of 2013. But, despite these setbacks, the industry has still managed to grow.”
Byrne recently gave evidence to the Joint Committee on Agriculture, Food and the Marine.
She said that a combination of low milk prices, higher than normal tax returns and the overhang of superlevy fines are putting pressure on dairy farm cash flows at the present time.
“Given these circumstances, it is important for milk producers to formulate accurate cash flow forecasts covering the next 12 months.
As part of this they must quantify accurately the real cost of producing a litre of milk on their farms.
“And if specific cash flow problems are identified then the farmers in question should contact their banks immediately.
“There are a number of financial tools that can be brought to bear in these circumstances.”
Looking to the future, Byrne confirmed that dairy farmers must make better use of the new management technologies that are now available.
“They also need to improve their people management skills,” she said.
“The recent Budget contained a number of measures which will simplify the transfer of land here in Ireland. This, in turn, should create opportunities for young people to develop sustainable careers within production agriculture.
“This will include the forging of farm partnerships and the development of share farming opportunities.”
Byrne said the recent growth in Irish dairy will be maintained.
“Yes, market volatility will be a challenge. But the financial tools are available to help producers deal effectively with this matter.”