Fresh milk industry turning sour as crisis bites

Ireland’s fresh milk supply faces a major test in 2014.

Already, some dairy farmers are not putting cows in calf due to severe fodder crisis effects. But the 10% of specialised dairy farmers who supply Ireland’s fresh drinking milk will have a major added incentive to not put cows in calf next December (which is necessary to guarantee fresh milk in shops in 2014).

Instead, they can switch calving dates and supply milk for manufacturing, in time for the abolition of EU milk quotas in April, 2015.

The deteriorating economics of winter milk production have already led to a significant fallout of the specialised suppliers of all-year-round milk for the fresh liquid industry. “It is an industry that is just about to flow down the toilet, so to speak, and it is happening in front of our eyes,” warned Co Cork dairy farmer Donal Kelleher during the recent Oireachtas Committee on Agriculture, Food and the Marine discussion with the Fresh Milk Producers farmers’ group and the National Milk Agency — which is responsible for maintaining a liquid milk supply in the State. Mr Kelleher revealed that the supplier group to which he belongs has lost 20% of suppliers in the past five years, and another 20% have signalled they also intend to move to manufacturing milk.

Farmer Jim Mulhall told the Committee: “The point is fast approaching where it will be more economically viable for us to export our dairy products, than to put them in the shop half a mile down the road. Already 85% of our produce is exported and that figure will expand under Harvest 2020.”

National Milk Agency chairman Denis Murphy told the Committee there has been no shortage of winter milk yet.

But he warned: “The confidence of registered milk producers in the all-year-round supply model for liquid milk for the domestic market has been shattered by the increased costs incurred in winter milk production in 2012-2013 and by the absence of any market response to these increases.”

“The future of the all-year-round milk supply model for the domestic liquid milk market is now vulnerable and has reached a tipping point.”


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