Dairy sector needs to grasp opportunity for change

Dairy Ireland was born out of farmers coming together from dairy discussion groups all over the country, with the idea of positively influencing the dairy industry outside of the farm gate.

The group has been in existence for five years and has had the opportunity to meet industry leaders and policy makers with the view to highlighting the farmers perspective and what is necessary to build sustainable family farm units in Ireland, and also to encourage career choices for farmers who might not own land but wish to build a future in dairy farming.

Ireland’s dairy industry was placed in suspension when milk quotas were introduced in the early 1980s, capping our production at just over 5bn litres nationally. The milk quota policy stagnated the industry, but at last this regime is coming to an end in 2015 and farmers can once again drive forward with what has traditionally been one of the more profitable farm enterprises of milk production.

However, the abolition of milk quotas is heralding in a new period of change and this can be both challenging and frightening.

Dairy Ireland set about asking itself ‘is the Irish dairy industry model fit for purpose to compete on a global stage in the 21st Century?’ and we concluded that it is not.

What are the blockages that impede the opportunity to expand milk production? Land mobility is a major factor that curtails dairy farmer expansion, farmers have to influence policy such as CAP, taxation and rules and regulations that impact upon farm partnerships and other mechanisms that can put land in the hands of energetic and enterprising farmers who can utilise this land to create wealth in rural Ireland.

Dairy Ireland believes that a sustainable milk price is the corner stone of financially sustainable farm enterprises, and it is our dairy co-ops and processors that return this milk price. However, our industry is fragmented at both processing and marketing level and this weakens our hand.

Many of our competitors are processing and marketing multiples of our national output; this volume gives them real power in the market place.

We must create an industry that can become a real world power of dairy production.

Bringing our industry together will give us strength — strength to innovate, market and real strength to compete.

Dairy Ireland has brought together an expert panel of speakers to attend our annual conference in the Firgrove in Mitchelstown on Thursday next.

The title of the conference is ‘Moving Forward with Confidence’, come along on the day and listen to how we can create financially sustainable and robust farm enterprises also hear the Friesland Campina story from Holland on how Dutch farmers have built their industry out of a situation of strength and choice — choice to be a world leader in dairying.

It is a very exciting time to be a dairy farmer in Ireland with the abolition of quotas in sight and an opportunity at hand to increase income by producing more milk. However, this growth has to be financially sustainable and we as farmers must be aware of the financial risks that expansion can bring.

* David Murphy is chairman of Dairy Ireland


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