After a winter of discontent, the future is bright for Irish dairy
Removal of milk quotas in 2015 bolsters confidence and majority expect industry to grow, finds Outlook survey
The Outlook survey shows most people expect overall industry improvements in the next five years
As the Irish dairy industry begins to recover from a disastrous winter and the ensuing fodder crisis, farmers remain confident in a future that holds the first opportunity for growth in a generation.
A new survey shows most people expect overall industry improvements in the next five years and, in particular, are confident in their ability to augment conditions on their own farms.
With the pending removal of milk quotas in 2015, detailed research by AIB paints a picture of an industry eager to get on with things.
“This positivity may reflect the fact that farmers believe the situation must improve following the weather-related pressures in 2012 and early 2013,” says the Outlook report.
“Nonetheless, it is encouraging to see that the fodder crisis has not severely dented enthusiasm.”
Agri-food sector exports from Ireland reached €9 billion in 2012 with dairy accounting for almost 30 per cent, and milk alone constituting 25 per cent of gross agricultural output. The Irish dairy sector produces 5.2 billion litres of milk a year from 18,000 farmers.
Of the 200 farmers interviewed for the survey – carried out by Broadmore Research and Amárach Research – almost six in 10 expect to see improvements within the next five years.
And while the weather is viewed as the major potential threat over that time span, almost half (48 per cent) of those surveyed intend to invest in their business in the next three.
“The Irish dairy sector is poised for its first opportunity for real growth and development in over a generation,” they say.
“IFA has calculated that the potential rewards for the industry, for farmers and for the economy as a whole, are huge: 9,500 additional jobs, €1.3 billion extra annual export revenue and a total of €300 million overall extra tax-take and social welfare savings are achievable by 2020.”
Unsurprisingly, the removal of milk quotas in 2015 features prominently in the research, and is seen as “the most important” opportunity for the sector in the coming years.
Although farmers see challenges in terms of rising input costs and price volatility, over half (57 per cent) intend to increase milk output between 2015 and 2020.
“In the event of milk price decreasing significantly over the next three years, 43 per cent of farmers would seek to reduce overheads or costs, while 12 per cent would get out of farming and 10 per cent would reduce herd size,” the report says.