ANY mooted plans for expanded milk production must be viewed sceptically unless they are based on cold hard facts and involve better income for dairy farmers.
Irish Creamery Milk Suppliers Association president Jackie Cahill, who issued the warning, said the ability at farm level to produce extra milk is not in question. “The much more important question was what markets were going to take the extra product, and how much of that export revenue would find its way back to the milk suppliers who were the foundation stones of the whole dairy sector edifice.”
He said the ICMSA has commissioned a report from Professor Michael Keane to estimate the likely cost of expansion.
His preliminary findings indicate that a 20% expansion between now and the year 2020 would require a capital outlay of €150 million.
Mr Cahill said he shouldn’t have to point out that a 20% expansion is very modest compared to the 50% increase in milk output that was set as a target in the recent Food Harvest Report.
But even this figure of €150 million for a 20% expansion will require serious thought and planning given the likely increased cost of funding in the future.
He said Professor Keane has also provided estimates of the annualised cost of this investment which worked out at €14.3m.
On a per litre basis, the capital investment would be 16 cent per additional litre produced or an annual recurring cost of 1.6 litre for extra production.
Mr Cahill said the question of who will fund this investment is an issue which the dairy industry as a whole must address.
“While farmers should be encouraged to expand, and facilitated if that is their intention, it is unreasonable for the cost of this expansion to be loaded on all dairy farmers,” he said.
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