Economic sustainability is the key challenge for the dairy sector moving forward, according to United Dairy Farmers’ chief executive Dr David Dobbin.
Speaking at today’s Agri-Food and Biosciences Institute (AFBI) dairy conference in Belfast, he added: “At farm level this means generating a day to day income plus having enough funds to invest in the future of the business.”
He continued: “Strategies are no good unless they are made happen. Farmers and processors must work together as an industry. This mans the supply chain must be aligned through to the final customer. The dairy industry must also squeeze out duplication.”
Dobbin went on to point out that growth within the dairy sector must deliver more profits, higher levels of employment and deliver a better lifestyle for everyone involved.
He added: “Currently, dairy is the fastest-growing sector within agri-food. However, profit margins are extremely low, compared with other sectors. This may impact on the industry’s profitability moving forward.
“Growth must be based on the growth of milk solids. This will give more powder and cheese yields, thereby delivering improved performance at processor level.”
Dobbin stressed repeatedly that the future for dairy is bright.
“From a farmer perspective, we must secure more from our grassland areas. The reality is that producers must make better use of grass and forage. Better handling of market volatility will also be important moving forward at farm level.”
Turning to the challenges facing milk processors, the United Dairy Farmers’ representative said that growth will only be delivered be delivered on the basis of companies being internationally competitive.
“If this is not achieved, local processors will be out of business,” he stressed.
“And pressure of this nature will work its way down the supply chain to farm level.
“Scale of operation is crucially important at processor level. The other option is to become more specialised. If we achieve neither, then we are caught in the middle with no future. Doing nothing is an excuse for getting out of business.”
Looking to the future, Dobbin made it clear that growth in dairy is occurring throughout the world. This includes China.
Future market opportunities will develop, where milk powders are concerned, will continue to present themselves, he said.
“Significantly, growth in cheese consumption is also envisaged in regions such as Asia.” He concluded: “The availability of cheap water is a huge advantage to the Irish dairy sector. We must continue to capitalise on these opportunities. The dairy sector must align itself with the issues of health and service.”