Processing capacity key to milk growth
With the processing capacity needed to handle peak supply being only 65% utilised across the year, Ireland’s seasonal milk supply pattern is one of many areas to be addressed in the plan to process up to 2.5 billion litres extra per year by 2020, said Mr Buckley – but all avenues open to processors would have to be maximised before any extra spending on plant and equipment.
He said 50% expansion would leave the industry depending about 93% on exports.
Cheese production could double, requiring new export markets.
In a largely de-regulated market, with little EU support, expanding Irish milk producers would face even greater price volatility than in recent years – when markets returned as little as 17 cent per litre of milk supply.
Dairygold Co-op can process up to 10% more milk in the short term, needing only modest capital spending, along with modification of the product mix, and co-operation with other processors, said Mr Buckley.
Also in the short term, he envisaged a superlevy threat pre-2015, forcing farmers into early drying off because of increased supply from extra heifers.
Longer term, a 40% milk increase is predicted in the Dairygold area, and a lesser increase in the rest of Ireland. Significant capital investment would be needed in processing, but he had every confidence that processors would minimise this investment through co-operation.
Speaking as Irish Dairy Board chairman, Mr Buckley said the agency will focus more on new product development, and must have a greater role in telling processors what product mix is needed.
He said there is a clear need for better co-ordination between the Dairy Board, co-ops, and researchers and called for greater focus on marketing expenditure for dairy expansion.
