Four dairy farmers leave milk production in Ireland every day, according to Teagasc, the agricultural development agency.

Dr Séamus Kearney, a dairy advisor with Teagasc, told the 700 delegates at the national dairy conference in Waterford that in 1983 - prior to the introduction of milk quotas - Ireland had 86,300 farmers engaged in the production of milk.

"Eight years after quotas arrived saw a fairly dramatic exodus of dairy farmers, with the number of milk suppliers in December 1991 estimated to be 50,600," he said.

"By 2000 the number of milk suppliers was 29,071. Fast forward to 2004 and the number of dairy farmers still producing milk stands at 23,767. Currently in the region of 1,400 dairy farmers exit the dairy industry each year for a variety of reasons," he said.

"This equates to four dairy farmers each day exiting milk production."

Dr Kearney said that for those who wanted to stay in dairy production over the next ten years, it would take a more detailed planning process to meet the next goal and farmers needed to make a plan for the future.

John Moloney, group managing director of Glanbia, said that scale, market access, innovation and cost management were the four critical factors both farmers and processors needed if they were to respond effectively to the challenges of today.

He said that notwithstanding the challenging market environment, he believed Ireland could have a market advantage, particularly in the area of added-value, dairy-based food ingredients with nutritional benefits.

"There are real opportunities if we can leverage innovation to differentiate from larger competitors and move up the value chain. However, first we must compete at near world prices to make step changes in costs and scale both at farm and processing level," he said.

A young dairy farmer, Philip Donohoe, from Goresbridge, Co Kilkenny said he wanted to stay in dairy farming but to maintain current spending power and lifestyle, his farm would need to make an extra €25,000 per year by 2010.

He said he did not have to do ground-breaking research or come up with new innovative methods for making money, and the wheel did not have to be reinvented, because there was plenty of information available.

Calling on industry leaders to lead and create, he said that farmers needed to set real financial goals.

John Malone, former secretary general of the Department of Agriculture and Food, said that the policy landscape was changing and there was a need to consolidate processing of base products.

He said the industry would need to involve the Dairy Board in processing and there needed to be a renewed focus on marketing butter.

There was also scope for increased cheese production.