Ireland's dairy production seen to grow

Ireland's total milk output is about 5.6 billion litres of milk, with an estimated farm-gate value of €1.8 billion (US$2.4 billion), while exports of dairy products and ingredients were valued at €2.7 billion (US$3.6 billion), making it the 10th largest dairy export nation in the world.

Dairy cows in Ireland are generally milked twice a day, with milk collected from farms by processing companies.

The majority of milk processors in Ireland are co-operatives owned by farmers, such as Dairygold, Lakeland, Connacht Gold, Town of Monaghan, Arrabawn and Tipperary. Two of the largest processors, Kerry Group and Glanbia, are publicly quoted companies with their shares listed on the Irish Stock Exchange.

Between 1975 and 1984, milk production in Ireland grew at an average of almost 6% a year, a pace that was one of the highest in the world. Growth was brought to a shuddering halt with the introduction of European milk quotas in 1984. They were prompted by infamous "butter mountains" of surplus stocks in subsidised cold storage.

This policy measure was designed to control milk production in Europe by freezing each country's production at their 1983 level.

When milk quotas were introduced, Ireland had 63,000 farmers milking cows on about 1.7 million hectares. Consolidation into larger herds resulted in seven out of 10 farmers leaving the business.

A large proportion was small scale and could not justify the required capital investment in housing and milking facilities, especially when quotas prevented any expansion.

In 2008, against a backdrop of sustained growth in the global market for dairy products, the EU agreed to abolish milk quotas from April 2015. There is an expectation that many new entrants will join the business once the barrier of quotas is removed.

In Ireland, dairy farming is generally operated on a seasonal grass-based system in that cows calve in the spring and eat as much grass as possible in their 300-day lactation.