However, the National Milk Agency (NMA) said the value of dairy output fell 11% due to lower milk prices which reflected the depresse d global market conditions for dairy products.
Despite falling prices, milk supplies surged to a record 6.4bn litres in 2015 — an annual increase of 13% compared to the EU average of 2% — helped, in part, by excellent weather conditions which boosted grass growth and reduced input costs.
NMA chairman Denis Murphy said Irish dairy farmers responded to the abolition of EU milk quotas in April 2015 with increased milk supplies and bigger dairy herds.
However, he said the economic benefit of increased milk supplies on dairy farms was wiped out by a 22% reduction in the average producer milk price which fell to 29c per litre.
“It was a challenging year for dairy farmers — a year of more work for less reward,” said Mr Murphy.
According to the agency, average dairy farm income fell 4%, despite the increase in milk supplies and a reduction in the cost of farm inputs.
The latest annual report shows that it was a good year for dairy exports, which rose 4% to €3.2bn, despite a slowdown in demand from China and the Middle East, and Russia’s retaliatory ban on EU dairy imports.
Mr Murphy said that dairy exports to customers outside the eurozone had benefitted from the euro’s weakness relative to sterling and the dollar even though dairy product prices on global markets had fallen 28%.
The NMA said Irish milk processors had subsidised produced milk prices at an estimated cost of over €100m last year.
The value of milk and dairy product retail sales in the Republic last year was valued at €547m.
Mr Murphy said Brexit posed serious trade and economic risks for the Irish economy with global markets remaining challenging.
“It will have serious adverse consequences for the economy and particularly for the Irish dairy and beef sectors, given that the UK is Ireland’s largest market for agri-food exports,” he said.
Source: IrishExaminer
Link: http://www.irishexaminer.com/business/irish-dairy-sector-fastest-growing-since-end-of-milk-quotas-426285.html