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End of Irish quotas will deliver major boost to dairy sector


CREAM RISES: Dairygold chief Jim Woulfe is confident about his industry’s future prospects

Ireland’s more than 18,000 dairy farms produce around 5.4 billion litres of milk annually, generating a farm-gate value of more than €1.8bn and an export value of €3bn each year. Ireland ranks among the world’s top 10 dairy exporting nations, exporting some 85 per cent of its dairy output to over 90 countries internationally. Overall, the Irish agri-food sector accounts for some 230,000 jobs of which about 34,000 are in the dairy sector.
However, since 1984 dairy farmers in Ireland have been regulated by an EU quota that has restricted milk production as part of the EU’s price support mechanism. The abolition of quotas in April 2015 will end this 30-year period of growth restriction for Ireland’s dairy industry and our farmers will be free to produce as much milk as they wish.

This prospect has brought new energy and vitality into the dairy sector which, with its tradition and passion in food excellence, will unlock vast untapped potential within Ireland’s dairy industry. Change for the better is now occurring in a manner which should help to generate higher income for dairy farmers as they and their processors take advantage of the opportunity to expand.

The expected growth in milk production will help to improve efficiencies and reduce processing costs in a variety of different ways, through greater scale, innovation and collaboration. The market for dairy products is also evolving and innovation is driving all facets of our business as we work to build new partnerships and develop new products to satisfy our customers worldwide.

Global demand for dairy produce is growing at a rate of 2.5 per cent per annum helped by markets in Asia and Africa, which are growing and generating more purchasing power; global milk production, meanwhile, is growing at around 2.2 per cent per annum. Ireland is extending its export reach from the current 90 countries to new markets and new routes to market targeting premium product sectors where possible.

The end of quota restraint presents a step change opportunity for the Irish dairy industry which is justly regarded as world class. Irish grassland is ideally suited to milk production and Irish dairy farmers are among the most efficient and productive in Europe.

Dairygold is Ireland’s largest dairy co-op, situated in one of the country’s most fertile milk producing regions in Munster, and they have forecast an expansion in milk production of between 55 and 60 per cent by 2020 over their 2011 production volumes.

As a co-op owned by farmers, Dairygold is excited about the opportunities which expansion will bring. Our focus for the last number of years has been to create the right foundation to embrace those opportunities. Last year, we recorded a €847m turnover and operating profits of €27m. We did this after paying a record milk price throughout the year as well as paying an additional year-end bonus of €7.5m to our milk suppliers and agri-customers.


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