The dairy sector was worth €17.6bn to the Irish economy in 2022, according to independent analysis by Ernst and Young (EY), commissioned by Dairy Industry Ireland (DII).

The new economic report published by DII found that this €17.6bn created €4.3bn in gross value added, which is wages and profits, for Ireland.

The €17.6bn is 75% more than the €10bn value placed on the Irish tourism sector, for example.

The dairy sector has 19 main milk processing sites and the industry processed 8.8bn litres of milk in 2022, produced by about 16,700 farms.

A total of €5.2bn was paid out to farmers in milk payments last year.

Some €5.2bn was paid out by processors in milk payments in 2022. \ Oliver Edwards

Investment

The report also found that €1.1bn was invested in dairy processing plants over the past five years, resulting in an additional €340m in wages and profits for the rural economy.

Global demand for dairy products continues to increase and this is reflected in Ireland’s milk production forecast, with a 9.2bn litre output by 2030, a 5% increase on 2022 volumes.

This is set to drive on investment in the sector, with capital expenditure by dairy processors between 2023 and 2027 forecast to reach about €865m.

Some €191m (22%) of this will be invested in climate action and sustainability initiatives.

DII chair Conor Ryan said that the report “showcases the remarkable success story of the dairy industry and underscores the economic contributions of our dedicated farmer suppliers and the tens of thousands of individuals employed by the sector throughout the island”.

The analysis is set to be placed in the hands of Government and opposition parties as the dairy sector grapples with nitrates constraints and other environmental pressures.

“We are eager to collaborate with the Government to establish the necessary frameworks to help Irish agriculture strike a balance between environmental goals and the economic vitality,” Ryan added.

Milk is produced on approximately 16,700 family farms. \ Donal O' Leary