Irish milk production makes huge growth spurt

The trend shown by the Irish milk supply since the summer of 2018 is striking. While producing countries in mainland Europe are showing a decline, the situation in Ireland is exactly the opposite. Given that Ireland was also ravaged by the drought, that's quite striking.

In October, milk supply was no less than 20% higher than 1 year earlier; in exact volumes, the milk supply increased by 111.000 tons to 661.000 tons. By comparison, in the same month the Dutch milk supply increased by 64.000 tons (-5,5%) to 1,1 million tons.

No problems with drought
Irish milk supplies are expected to exceed 2018 million tonnes in 7,5, which means an increase of 1% to 2%. Compared to the increase in October, this is not too bad, because the milk supply in the first half of 2018 lagged behind 2017. For 2019, the milk supply is expected to rise to 7,8 million tons (+4%).

Almost all players on the Irish dairy scene anticipate a significant increase this year. For example, Glanbia, the largest milk processor in the country, expects an increase of 5% (+120.000 tons). The growth figures that Glanbia has shown over the last 10 years are impressive. Between 2009 and 2018, milk supplies increased by 82% to 2,37 million tons. This means that the company currently has a market share of more than 30% in the Irish milk pool.

The other major players (such as Dairygold, Kerry Group and Lakeland Dairies) also provide significant increases in milk production.

Impact on dairy market?
The question is whether the milk increase will disrupt the European dairy market in 2019. In terms of size, Ireland is a mid-range European market and not a price maker or price breaker. This does not alter the fact that the Irish milk increase is not going unnoticed on the European mainland. For example, parties on the European market have announced that more Irish butter and cream has been transported to the mainland in recent months. This, among other things, put pressure on the butter price in the fourth quarter.

The growth that Irish production has shown since the fourth quarter is now being offset by the negatives in the Netherlands, France, Italy and Germany. If the milk price and the growing season are good this year, European milk supplies could easily increase again later this year. And then the Irish milk increase is probably more noticeable. In the longer term, the growth spurt shown by the Irish dairy sector is therefore a factor that should not be underestimated.