Recovery of Irish milk production on the horizon

In February 2024, Irish milk supplies amounted to more than 340.000 tonnes. Compared to the almost 393.000 tons of February 2023, a significant decline. "Irish milk production in the first two months of this year is 13% lower than the same period last year," says Kennedy. What's going on in the Irish dairy sector?

Irish milk production is therefore declining compared to last year. What is the cause of this?
''The main factor that hampered milk production at the beginning of this year was the wet weather. The Irish dairy system is largely a grass-fed system. If a cow eats more grass, her production increases. But last February was the wettest in years. March wasn't great either. Getting the cows outside early just wasn't possible this year."

''Secondly, our calves arrived later than normal. To do this, we look back to 2022, when the milk price was much better. Irish dairy farmers decided to leave their cattle outside longer so they produce more milk in October and November 2022, when it is time to bring the cows indoors. The cows were brought in later than normal. This in turn delayed insemination and disrupted the calving pattern. This will only put pressure on milk production in the short term.”

"But the past few months are not the most important for our milk production. Typically, the first quarter provides only 10% of our milk production. Normally our milk production peaks in April, May, June and July."

What stands out about the Irish weather recently?
''In the past period we have had unusually warm months as well as wet ones. It was a relatively warm winter. Our summers normally have an average temperature of 18 to 19 degrees. That is just about the optimal temperature for grass. I'm by no means a meteorologist, but in general we're now expecting wetter summers and warmer winters here. An image that also shows the rest of Europe."

What is the mood among farmers at the moment?
''Irish farmers are having a tough time at the moment, caused by, among other things, the bad weather. Like last week, that was really bad. Additionally, in addition to the heavy lifting, this would impact long-term sentiment. This also includes the fact that a lot is happening within the sector and there is sometimes confusion about what exactly is expected of farmers by politicians and society. On the other hand, we at Bord Bia know that Irish dairy farmers are doing very well. For example, they are well on their way to improving their CO2 footprint in order to achieve climate goals. The footprint has been reduced by 10% per kilo of emissions over the last nine months. Irish dairy farmers are therefore ahead of the national sustainability agenda. They are also switching to better fertilizer, breeding more productive cows and other important small steps in the right direction. We feel responsible for ensuring that farmers actually realize that they are moving in the right direction."

What is your expectation regarding the development of milk prices on the world market and the Irish milk price?
''To make an estimate of future milk prices, we first have to reflect. Demand for dairy has fallen over the past eighteen months, for several reasons. To start with, high consumer prices will influence purchasing behavior from 2022 onwards. High quality butter and cheese were exchanged for private label and, for example, margarine. This has remained virtually unchanged since then and European demand remains truly moderate. When we zoom out further we gain more insights. China is the largest importer of dairy. If China's demand increases, it will cause an increase in the overall milk price structure. Over the past three years, China's production has increased by about 6%. The weakened Chinese demand has resulted in lower milk prices."

''95% of all Irish milk produced is exported. We produce about 8,5 billion liters per year. That contribution to world production is small. Ireland will have little influence on world milk prices.”

''I believe that consumer prices will fall once inflation decreases, which will promote dairy consumption. I think the Irish milk price will then improve. This is mainly because of our sustainability agenda, on which our sector is well ahead. We have a very clear picture of the CO2 footprint of our farmers, which is very low. Most global food companies have made clear and public commitments to reducing their footprint. I am convinced that Ireland's grass-fed production system and its associated control and monitoring structure will enable Irish farms to achieve these ambitions better than anyone else."