The Russian Federation ban of EU dairy products in August has certainly been a contributing factor to the downward trend of milk price. However, it is bemusing to see how much attention this Russian ban gets in Ireland, when the exponential increase of dairy powder imports into Ireland in recent years hardly gets a mention.
In layman terms, Ireland’s exports to Russia last year amounted to a milk equivalent of less than 20 million litres. Compare this to the volume of milk required to produce the products imported into Ireland last year:
- Lactose imports; milk equivalent exceeding 550 million litres;
- Whey imports; milk equivalent exceeding 450 million litres; and,
- Skim Milk Powder; milk equivalent exceeding 270 million litres.
With just four months to go until milk quota abolition, is Ireland ready to become a leading global dairy exporter when it imports a milk equivalent of 1.2 billion litres of product, which equates to one-fifth of Ireland’s existing milk pool?
It is a little rich that Irish dairy industry stakeholders should be among the first to go crying to Brussels seeking supports following the Russian dairy ban. Ireland exported less than €7 million of dairy products to Russia last year, accounting for less than 0.25% of Russia’s total dairy import value.
Why has the industry not expressed the same level of concern as the Irish import values of lactose, whey and Skimmed Milk Powder (SMP) increased from €27.02 million in 2010, to €131.4 million in 2013?
Why has Ireland seen a €104 million increase of such product imports in the space of three years?
Further scrutiny is required to establish the end use of these imported ingredients. The animal feed sector uses some of these aforementioned products, but these ingredients are also essential in formula manufacturing.
If the infant formula industry in Ireland plans to market Irish made products on the back of Irish dairy farmers’ pasture-reared Irish cows, and an industry-supported ‘Origin Green’ sustainability programme, then surely Irish farmers need to be assured that such products are produced with Irish-sourced ingredients?
The increasing dairy import trend into Ireland has continued into 2014. The latest available figures from the CSO show that the value of SMP imports to August of this year is double that for the corresponding period in 2013.
I agree with the argument that the Russian dairy ban has a major impact on the overall market equilibrium internationally, but the impact of dairy product import growth into Ireland has the potential to cause greater economic and reputational damage in the future.
Before jetting off to Brussels to look for solutions to current milk price difficulties, the industry first needs to clarify and, where required, rectify the ever-increasing volume of dairy powder imports into Ireland.
Moreover, Bord Bia needs to provide reassurance that the reputational and financial support given by Irish dairy farmers to the Origin Green sustainability programme, is not being used to promote dairy products that use imported key ingredients.