Dairy farmers worried that Irish dairy farmers might flood our market with cheap cheese when quotas disappear in 2015 can rest easy in their beds – but maybe only for the time being.
That is the view of Catherine Lascurettes, executive secretary of the National Dairy and Liquid Milk Committee of the Irish Farmers’ Association, who was speaking at the Semex conference.
Despite the dairying potential and enthusiasm for expansion, calls from the Irish Government to increase milk production by 50 per cent by 2020 (from 5.2 billion litres to 7.8bn), significantly more dairy heifers in the pipeline – and increasing genetic merit of those replacements – the main processing investments so far in Ireland to cope with the additional milk after 2015 had been by Glanbia and Dairygold. And these were powder plants.
“No new cheese plants have been announced yet,” she said.
In addition, farmers would have to invest £1.5bn on their farms to deliver that 50per cent increase, and that needed to be matched by a significant investment from other co-ops.
Capitalise
“Ireland is well placed to capitalise on 2015 and the freeing-up of the quota regime. It has low production costs, good grass and plentiful water, well-trained enthusiastic farmers, a farmer owned industry, a clear strategy and blueprint, increasing genetic merit in the herd and a politically supportive Government,” she said.
“But there are a lot of difficulties to overcome too. Twinned with the huge investments necessary there are challenges over Ireland’s notoriously seasonal supply curve, its farmer’s access to credit [which is worse in Ireland than the UK], land prices and availability, farm fragmentation, business expansion skills, variations in efficiency levels, uncertainty on CAP reform and volatile milk prices and margins.
“We have a lot of challenges to overcome. No one should be worried that the UK market will be flooded after 2015,” she said. “There will be new markets for Ireland in Asia, the BRIC countries, North and South Africa and Europe, and we will continue to make the full range of dairy products, not just cheese,” she insisted.
She admitted she did not know whether a 50 per cent increase in production was realistic by 2020, but thought that a 25 per cent to 30 per cent increase might be. But that would depend entirely on margins. The current Irish price was around €0.33 cents (27p), while the cost of production was €0.24 cents (19p), excluding labour and investment costs.
“Irish dairy farmers will not produce at a loss,” she maintained
Source: Farmers Guardian