Walsh makes calls to rationalise dairy sector
The sector has almost 28,000 milk producing dairy farmers and about 36 co-operatives including 23 milk processors with 27 milk processing sites, 15 butter plants, 13 powder plants, 10 cheese factories and 7 casein plants.
Mr Walsh, speaking at the ICOS conference in Limerick, said developments in the WTO and likely trends for the future of the CAP make rationalisation moves in Ireland imperative.
The acquisition by the Kerry Group plc of Golden Vale and the purchase by Lakelands of the Bailieboro milk processing business from the Kerry Group were moves in the right direction.
But there was a need to examine the industry more strategically. In association with the industry and Enterprise Ireland, he had commissioned a study of the dairy processing sector.
Mr Walsh said the terms of reference enables the consultants to look at the sector's structure and efficiency.
It will also look at market opportunities, including the current product mix and potential product options necessary to exploit new market opportunities.
The study will consider structures elsewhere, in particular Denmark, the Netherlands and New Zealand.
Mr Walsh said the challenge for the Irish dairy industry is to ensure it develops to the maximum extent within the context of the quota system.
Enterprise Ireland Director Mike Feeney called for greater innovation across all sectors of the food industry.
He said there is extreme downward pressure on commodity prices.
The development of new value added products in areas such as functional foods is the only way for the food industry to maintain and improve market returns in the current climate.
"We are now in the age of consumer power. They are demanding new and innovative products and the major supermarket groups are responding to this." he said.
