EU agricultural commissioner Phil Hogan has ruled out re-introducing milk quotas to address the current market imbalance while hinting that some form of supply control will be necessary.

Global dairy supply continues to outpace demand, putting pressure on markets in both Europe and worldwide, Mr Hogan said in a speech at a German Farming Association conference in Hannover.

Despite efforts to find new markets for EU dairy products and some encouraging exports, opportunities for increased demand are limited, he said.

“Accordingly, more focus must come on the supply side,” Mr Hogan said. “But let me be outspoken on one thing: a reintroduction of the milk quota, also on a temporary basis, is politically not an option and legally not possible.”

The European Commission is preparing another suite of measures to support the sector.

Germany, France and Poland are pushing for the Commission's new aid package for the sector to be tied to cuts in the production, a move which Ireland is opposed to.

The Republic's milk production rose nearly 15 per cent to 6.9 billion litres in the first full year since the lifting of quotas, according to the Central Statistics Office (CSO). This was one of the biggest output jumps recorded across Europe.

However, the Republic only accounts for about 4 per cent of supply in Europe.

Mr Hogan also said he wanted rapid talks about Britain’s exit from the EU to minimise disruption.

“Farmers know better than anyone that you need stability and certainty to plan for the future,” he said.

“My (Commission) colleagues and I have therefore called for a swift and decisive negotiation, in the interests of both sides. It’s essential that we set in train the essential steps to bring clarity and stability to the situation as quickly as possible.”

Additional reporting Reuters