Higher value dairy exports will move ‘closer to home’ - Ornua

As herd sizes fall, Ireland will have to focus on higher value dairy exports to nations “closer to home”.

That’s according to Ciaran Aylward, economist at Ornua, who was speaking at the Global Dairy Outlook panel at the Irish Farmers Journal Dairy Day in Páirc Uí Chaoimh.

So far this year, Bord Bia have launched Irish dairy campaigns in Thailand and Vietnam as well as beef campaigns in South Korea and China.

However, responding to a question from panel chair, Jack Kennedy about the possibilities of growing Ireland’s dairy exports to Africa, Aylward said the growing costs of transport and tax will mean the sector might have to change their focus.

“The question about a lot of export demand and where growth is will there be enough milk?” he said.

“As milk becomes scarcer, we’ll probably start looking closer to home. We’ll always be keeping an eye on China and Africa but in terms of shipping and value added. China is a tricky market but there definitely is scope for specialist ingredients.”

Echoing Aylward’s message, Sean O’Brien, chairperson of Dairygold said it's about quality, not quantity.

“That premium product that’s going out across the world, grass-fed, we have to keep banging that drum. It is working, we’ve seen the milk price rise into a decent base milk price, the problem is the two-tiered system.”

Yield increases

Although Aylward said that herd sizes will shrink globally, he said there is still scope for yields to rise.

Yields of milk solids have been increasing in the United States and Australia in recent years, however, European figures have begun to plateau.

The Ornua economist said that there are opportunities for growth in eastern European and developing countries to optimise their production.

“There’s limited scope for growth,” he added.

“Certainly, in the likes of Germany and the Netherlands, we’re starting to see a weakness in cow numbers but that has been offset by stronger milk in the likes of Poland and the smaller eastern European countries.”

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