Teagasc: Irish milk costs among lowest in world

A detailed study of competitiveness in the main sectors of Irish agriculture has found that the country is still one of the lowest cash cost producers of milk globally.

Profitability, costs of production, value of output and some partial productivity indicators such as milk yield, stocking density, cereal yield, and labour productivity were examined in the Teagasc research.

Data used in the Department of Agriculture-funded study was from the Farm Accountancy Data Network published by the European Commission.

The analysis again reaffirmed the competitive advantage associated with the Irish dairy farm system. It revealed that dairy farms continue to exhibit relatively low cash costs of production compared to key EU and international competitors.

Fiona Thorne, Teagasc economist and a co-author of the report, said cash cost in Ireland in recent years, at €2.7 per kg of milk solids, was one of the lowest amongst the key EU dairy producing regions.

“Our latest research shows that based on a total cost competitiveness index, we are finally beginning to see our total economic costs reduce in an international context, due to increases in scale,” she said.

Anne Kinsella, Teagasc, who helped write the report, said one of the implications of the study is the potential impact Brexit could have for Irish beef farms. It shows high cash and total economic costs of production are evident for Irish beef, with costs much lower in regions such as Brazil and Argentina.

“This could have profound implications on the competitiveness of Irish beef on UK markets in a more liberalised trade environment post Brexit,” she said.