DAIRY FARMERS will increase their production by 23 per cent between now and 2020, Teagasc director Prof Gerry Boyle told the Teagasc National Dairy Conference in Athlone, Co Westmeath, yesterday.
Prof Boyle said this was a conservative estimate and would mean the value of milk output would rise from €1.5 billion to €1.8 billion and dairy exports were expected to grow from about €2.5 billion to just under €4 billion.
He and other speakers addressed the need for structural reform both at farm and processing levels, and he said the ability of the processing sector to handle the additional output could not be taken for granted.
"Up to 2015, the sector will have no difficulty in processing the relatively small increase in the quota but, following its abolition, significant investment in additional processing capacity will be required," he said.
He added that Teagasc had estimated if milk output increased by 25 per cent between now and 2020 with an unchanged product mix, an additional 30,000 tonnes of cheese-processing capacity would be needed, with 40,000 tonnes of extra butter. He said if all of the additional milk was processed as cheese, a 100 per cent capacity would be needed, amounting to an extra 140,000 tonnes of processing capacity.
He made his remarks as it emerged the 17 milk-processing companies in the country had met last week to discuss plans drawn up by the Irish Co-Operative Organisation Society aimed at greater co-operation to achieve better efficiency ahead of the ending of the milk quota system in 2015.
The society's director general John Tyrrell said: "We are very encouraged to see that the meetings held have reflected strong agreement between the attending co-ops that there is a beneficial and recognisable need to restructure the industry.
"However timely, this is a flexible concept and one which can evolve as necessary. This project is a work in progress and we are delighted to have had representatives from the entire processing capacity in the country - which shows a willingness to work together to achieve this common goal."
Aaron Forde, chief executive of one of the co-ops involved, Connacht Gold Co-Op, said his organisation would be looking carefully at the benefits that might flow from such arrangements and would be part of what was being planned.
The guest speaker at the conference, Preben Mikkelsen, former executive director of the Danish Dairy Board, said Irish dairies had to concentrate like Denmark, Finland, Sweden, Norway and the Netherlands on the huge task of securing the necessary capital to invest in product development and global marketing.