Milk production in Ireland has shown a sharp decline over the last few months. In November 2023, Irish dairy farmers delivered just 388.7 million litres, no less than 19.8% less than in the same month a year earlier and also 16.6% less than in November 2021. That follows a decline of 12.6% in October compared to a year ago.
Over the first 11 months of 2023, Ireland’s milk production reached 8.3 billion litres, which is 2.3% less than in the same period the year before, the Central Statistical Office reports. In all 11 months, Irish farmers delivered less milk year-on-year, although there was a less pronounced decline in the first few months of the year.
Irish dairy companies but also their farmers/members should start to worry, according to the president of the Irish Creamery Milk Suppliers Association (ICMSA) Denis Drennan. He explained that the steep fall in production figures for 2023 was down to a number of factors including milk price being below the cost of production and extremely difficult weather conditions that had cows being housed earlier than normal.
But he also confirmed that there was no doubt that new nitrates restrictions including cow banding and the reduction to 220 N per hectare from 1 January 2024 were very significant factors. The reduction combined with ‘Cow Banding’ was effectively working as a destocking policy, he thinks.
According to Drennan, it was self-evident that the question of volumes for those Co-ops that had invested heavily in modern processing facilities was going to become an issue. “Obviously, you’d think that competition for milk supply is going to drive up milk prices. These Co-ops have very significant farmer shareholding and the real danger here is that while milk prices might rise, the value of farmer shareholdings in these Co-ops could fall as the markets look at the falling volumes against the processing capacity.
“It’s very frustrating for ICMSA and Ireland’s dairy farmers because we think that this is an entirely false binary – we believe that it was and is entirely possible to match production volumes to scientifically proven sustainability targets as well as carefully calculated processing capacity. Our challenge – which we continue to work for – is the reconnect all 3 elements and the first element must be a consistent and sustainable milk price that allows dairy farmers to produce the necessary volumes.”