Irish farming is on the cusp of “the most fundamental change in a generation” as EU quotas limiting milk production are lifted after 30 years, Agriculture Minister Simon Coveney has said.
“The shackles come off next April and following that we will have an exciting mix of opportunity and challenge for all stakeholders,” he told the National Dairy Conference in Dublin.
The ending of quotas at a time of growing world demand is the “opportunity of the century” for the dairy industry, said Bord Bia chief executive Aidan Cotter.
The world’s soaring middle class and the end of the “war on fat”, as ageing consumers seek out healthy proteins, all provide huge opportunities for the Irish dairy industry.
Global consumption of dairy products is set to grow by 2.4pc a year on average to 2023 with the highest growth rates in Asia, China, India and Africa, he said.
The Irish dairy industry – which is already worth €3bn and exports 40pc of its products to non-EU markets – is well positioned to benefit from this growth, said Mr Cotter.
The number of dairy farmers in Ireland plummeted from 68,000 to 18,000 since 1984 when EU quotas were put in place, but these numbers are set to grow again as restrictions are lifted.
Irish farmers are set to produce 18pc more milk by 2017 to meet growing world demand, as 60pc of dairy farmers plan to expand production and up to 1,000 are likely to convert from other farming sectors, Teagasc director Prof Gerry Boyle predicted.
But Kerry Group chief executive Stan McCarthy sounded a note of caution about the need to be realistic about the opportunities and put a huge amount of groundwork into successful expansion.
“I hate to spoil a good story with the facts,” he told the 500 delegates, noting it was crucial to thoroughly research the legal framework and consumer demands of each target market.
He said reputation was everything, but it could be damaged very easily and it was vital to enforce the highest standards.
Department of Agriculture secretary general Tom Moran agreed that “optimism without planning is folly” and it was no longer enough to sell a postcard image of Ireland. This had to be backed up with sustainability and quality.
Donal Dennehy of Danone, which is a huge producer of infant formula in Cork, said it was also important to recognise that Ireland was not universally known.
He said most people in China, for instance, had no idea where it was and a lot of work was needed to sell Irish products internationally.
Michael Hanley of Lakeland Dairies said that his biggest fear was of not having enough milk to meet customer demand, although the example of the Russian import ban showed how the situation could suddenly change.
Dairy prices have fallen from last year’s high and will stay volatile, the conference heard.
Source: Irish Independent
