Builders will be the main dairy jobs boom beneficiaries

At the launch of a new report on the Economic Impact of the Irish Bio-Economy, Teagasc Director Professor Gerry Boyle; Dr Eoin Grealis, SEMRU (NUIG); Prof Cathal O’Donoghue of Teagasc; and Dr Peter Heffernan, CEO, Marine Institute.

The construction industry is likely to be the greatest beneficiary in employment terms of dairy expansion, followed by the agri-food sector, with some knock-on effects of increased employment in industry and services.

That was one of the conclusions of Teagasc economist Dr Fiona Thorne, when a new report on the Economic Impact of the Irish Bio-Economy was launched in Dublin.

She said farmers increasing their cow numbers from 2013 to to 2025 would support an extra 3,400 jobs, primarily in construction, but 15,000 jobs in the wider economy are expected due to dairy expansion.

The current milk production target is 8.1 million litres of milk in 2025, which would represent an increase of almost 50% on the quota limited production levels of recent years.

The building industry would be the main jobs benefciary, because of the requirements to increase capacity in sheds and in milking parlours.

To achieve the 8.1m litres in the Foodwise industry expansion plan would require an investment of €1.7 billion (one third in additional cows, half in milking parlours, 15% in buildings, and a small amount in land improvement).

An extra €0.5 billion investment would be required to move to a higher expansion level of 10% plus.

From 2007 to 2013, in anticipation of quota removal, and to maintain normal business efficiency, dairy farmers already invested almost €2 billion.

Much of this investment is funded from reserves, rather than borrowings.

The number of dairy farms is likely to increase by about 5% to achieve the base target; it would need to increase by about 11%, to achieve the extra 10% in milk volume.

Farmers in Ireland are relatively well placed to make these investments, because their debt levels are low compared to dairy farmers in Europe or elsewhere. The average debt level per cow in Ireland is €656. In the Netherlands, it is €8,394; and in Denmark, it is €11,918.

The debt level in the UK and France ranges from €1, 600 to €2,300.


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