Milk agency flags changes in north-south trade relations

Brexit raises the possibility of major disruption to sales of milk in the shops — because more than one in every four litres of fresh milk comes across the border from Northern Ireland.

Currently, goods and services can move freely from the Republic to Northern Ireland and vice versa, but that could all change if the border becomes an EU land border.

Meanwhile, rising imports of fresh milk from the North have taken its market share to more than 25%, confirmed the National Milk Agency last week.

The agency is the statutory body for regulation of milk for liquid consumption, and its 2015 report also shows that liquid-milk consumption has risen to its highest ever level in Ireland, adding 4% last year to reach 601 million litres.

National Milk Agency Chairman Denis Murphy said the market has reached an estimated retail value of €547 million, despite intense price competition knocking 1 cent per litre off the national average retail price, estimated at 91c in 2015.

Brexit is the latest development in a turbulent period for Irish dairy farmers, of whom 10% are registered to supply 14% of Ireland’s domestic liquid milk supplies on an all-year-round basis.

Mr Murphy stated: “The abolition of EU milk quotas from April 2015 saw Ireland’s dairy sector emerging as the fastest growing dairy sector in the EU, with an annual growth rate of 13% in 2015. But it has been a year of more work for less reward for the farmers, he said, due to the reduction of 22% in the average farm-gate milk price.

“Average dairy farm income fell by 4%, despite the increase in milk supplies and the reduction in the cost of farm inputs.”

2016 commenced with a combination of falling milk prices and a late, wet, cold spring, making it another very challenging year for all stakeholders in the Irish dairy sector, and particularly for dairy farmers.

Mr Murphy warned that dairy farmers in this post-quota era will seek to maximise milk production from their available land platforms, and increase supplies from a low-cost, pasture-based, seasonal production model.

“For many registered milk producers, this change in their supply portfolios, with manufacturing milk becoming their main market, will be a challenge to their commitment to providing all-year-round supplies for the liquid milk market.

He said they will need a clear framework and adequate winter milk price incentives to say with all-year-round supply of fresh quality milk for consumers.

Meanwhile, the future for Northern Ireland’s liquid milk industry and its reliance on the southern market is also under question, due to Brexit.

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