The National Milk Agency has warned that the cut to the nitrates derogation, succession and labour availability pose a risk to the supply of fresh milk to the State.

The agency also warned that processors will need to consult with their producer panels to determine what increase in the compensation levels will be required to ensure the continuity and sustainability of all year-round milk supplies for the domestic fresh milk market.

“Retailers and consumers will also need to be made aware of the situation and of the emerging risk to the domestic supply channel for fresh milk in the State,” the agency warned in its report.

It said it was regrettable that the interim review of the nitrates derogation was based on water quality trends over a single year period.

Compiled prior to the proposed cut in the derogation, the agency said that Teagasc data “set out clearly” that, dependent on soil types, improvements in water quality from management actions can take several years to manifest themselves.

The greatest impact will be on herds which are in the highest band with average annual herd yields exceeding 6,300 litres per cow, it warned.

For liquid milk producers who tend to have large herds, high-yielding cows and high stocking rates per hectare, compliance with the increasing number of environmental regulations and the reductions in the maximum permissible stocking rates per hectare are likely to have a “transformational impact on the sustainability and profitability of their dairy business model”, the agency warned.

“The commitment of registered producers to an all yearround milk supply model with its high-cost requirement for spring and autumn calvings and winter milk supplies is being undermined,” it added.

The agency regulates the supply of milk for liquid consumption through the State.