Dismantling EU milk quota will open up opportunities for producers

THE planned dismantling of the EU milk quota system will open up new opportunities for Irish milk producers to expand, the Teagasc national dairy conference was told in Cork yesterday.

Delegates heard how Ireland is one of just six countries in western Europe that is expected to be able to expand milk production in line with the quota increases, agreed as part of the CAP “health check.

Preben Mikkelsen, a Danish dairy and food consultant, told the conference the structure of milk production in Ireland is a major challenge to expansion, and that the Irish dairies have to combine to be competitive.

He also said it is essential to establish an efficient quota allocation system, without restrictions, to allow the structure of milk production to improve.

Predicting a positive future demand for dairy products, Mr Mikkelson said consumption in the European Union is expected to increase by the equivalent of 8 million tonnes of milk by 2014, while global demand is expected to increase by 2.5% per annum.

Teagasc director Prof Gerry Boyle said milk price volatility is now a fact of life due to the reduction in market supports. But Teagasc research has shown that with “best management practices” expansion can be profitable.

He said farmers will need to implement strategies to deal with price volatility if expansion in milk production is contemplated. Relentless cost containment will be critical to any strategy.

Prof Boyle said even looking at a conservative expansion scenario of a 23% increase in quota by 2020, it could add €750 million to Ireland’s GNP.