Milk is the white gold of the rural economy, with the recent ICOS National Conference in UCC hearing that dairy expansion from 2016 to 2020 will result in a €2.7 billion economic impact for rural Ireland.
John Higgins from EY Ireland told the conference that, for each additional litre of milk produced, there is a 90 cent additional economic benefit.
It was part of a welcome optimistic message from their co-ops for dairy farmers, as they face into a demandingly busy time of year.
They can take some solace from the news from the co-ops that the industry is on solid ground, with a strong performance in 2017, ahead of the challenges on the horizon.
Milk collections in 2017 were 9.1% above 2016, and farmer incomes benefited from a healthy average milk price, increasing from 23c per litre in mid-2016 to 35c.
Most co-ops anticipate continuing growth in milk output.
Following very significant investments in processing capabilities, co-ops say they have robust and strategic plans in place to deal with growth in milk output, which is seen as both a challenge and opportunity.
The good news continued this week, with the co-ops revealing how they plan to keep every litre of milk produced in Ireland out ahead of the competition as the most carbon efficient milk in Europe, which is seen as a distinct competitive advantage for Irish dairy farmers.
The foundation is there for continuing prosperity.
Even the challenge ahead of restricted availability of skilled labour at farm level should be interpreted as a mark of the sector’s success.
It is one of the few, if any, economic sectors in Ireland offering more than 6,000 job opportunities.
These job opportunities are in rural Ireland, where they are most needed.
Income volatility could spoil it for dairy farmers, but the range of fixed milk price schemes now offered by Irish co-ops was welcomed at the ICOS National Conference as the simplest and most cost effective means for farmers to to hedge against future milk price volatility.
And co-ops welcomed the commitment of the Departments of Finance and Agriculture to an agri-taxation review in 2018 to examine income stabilisation specifically, and are happy that their ‘555’ income stabilisation proposal remains on the table, and has been endorsed by the European Commission.
The ‘555’ income deferral scheme would allow farmers defer a small proportion of their income in a good year, and draw it down in a bad year.
On Brexit, the co-ops said it is still impossible to predict the final outcome of the process, so all the industry can do is continuously bolster its strength and competitiveness, and further intensify its global marketing, innovation, and efficiency.
After this week, that marketing can include the message that the carbon footprint of fat and protein corrected Irish milk has reduced from 1.21kg in 2014 to 1.14kg in 2016.
That result, from carbon assessments on our dairy farms since 2012, copperfastens our recognition by the EU’s Joint Research Centre in 2010 as the most carbon-efficient dairy sector in Europe, with greenhouse gas emissions of 1kg per kg of dairy product, compared to the EU average of 1.4 kg (and 18.4 kg per kg of beef product, compared to the EU average of 22.2 kg).
That’s an important message to consumers in the 155 countries that import €4 billion of our dairy products and ingredients each year.
Irish greenhouse gas emissions are only 1.4% of the EU total (2015 figures). Nevertheless, co-ops chairman Martin Keane this week acknowledged the dairy industry’s leadership in its responsibility to protect the environment by fully adhering to the principle of sustainable intensification — but without imposing expensive solutions on the dairy farmers who are producing Ireland’s rural white gold.