FARMERS who are borrowing to expand their herds or processors who are borrowing to build a new drier costing millions will be asked probing questions by their bankers regarding the certainty of their future incomes, and their capacity to pay back their borrowings.

Ireland’s dairy sector may have to look at new models for milk pricing and for managing global market volatility, say milk industry experts.

A cultural shift towards commercial hedging mechanisms to manage volatility in milk price and animal feed costs would make Irish dairy farming more attractive to US agri-food investors.

Risk management tools to ensure the dairy industry remains competitive and profitable in a more volatile future will be discussed at a workshop in the Cork Institute of Technology next Monday.