50% more milk in five years ‘very reasonable’
Side by side with these opportunities are risks which must be carefully managed, to avoid serious financial problems.
While some device for reducing EU dairy mountains in the late seventies and early eighties was necessary, the implementation of quotas for over 30 years was a disaster for Irish farmers, rural Ireland and the economy of Ireland.
Farmers who were well developed and had good quotas, or farming in areas where quotas were freely available, might disagree with this statement. But tens of thousands of dairy farmers who were forced out of dairying by quotas are well aware of the financial problems that quotas caused.
During the quota years, many farmers suffered from large super levy fines. It is difficult to understand why some gambled so heavily on increasing milk production beyond available quota, when it was very obvious that there was a significant increase in cow numbers.
New entrants, and some other farmers, were encouraged to expand too fast too soon, in preparation for the post-quota era.
Farmers who expanded far beyond their available quotas had big losses, because in addition to superlevy, they lost a lot of money due to very short lactations, under-feeding and over-culling.
The most important practice over the past few years was to be ready for expansion after 2015, by having healthy herds and adequate high quality replacements, together with high quality pastures.
When milk quotas were introduced, Ireland and New Zealand were producing the same amount of milk but New Zealand is now producing four times more milk than Ireland.
If conditions are right, a 50% increase in Irish milk production over the next five years seems a very reasonable expectation.
Quotas prevented European milk processors from entering new and expanding markets, which have increased by over 20% in recent decades.
Even though Ireland is exporting dairy products to 100 different countries around the world, it will be tough work to sell increasing production into some markets where non-EU countries are well established.
