A small volume of Ireland’s milk pool will be impacted by Nestlé’s planned closure of its Wyeth Nutrition plant in Askeaton, Co Limerick.

At an average milk price in 2022 of 50c/l, the €129m that Wyeth spent on ingredients in 2022 is equal to 258m litres of raw milk.

This equates to about 3% of the national milk pool. However, there are some individual processors who will be more exposed than others.

The plant is to cease operating by the first quarter of 2026 and Nestlé will also close its research and development centre at the site by 2025.

The closure will result in around 542 job losses in the area.

The company said that external trends have significantly impacted demand for infant nutrition products in the greater China region.

Nestlé added that it has not been able to find a buyer for the site.

Bord Bia said it was disappointed with the move. Its data shows that the value of specialised powder exports increased in 2022 by €70m to €730m, up 11% on 2021 figures.

However, much of this increase in export value was driven by increased sales to the US, which experienced infant formula production issues and product shortages.

One of the criticisms of the Irish dairy industry in the past is that farmer-owned co-operatives weren’t capturing the value from the infant milk formula market and that foreign-owned companies such as Wyeth, Danone and Abbott were the ones adding the value to Irish milk.

Ironically, it is because of this that Irish processors and the milk price they can afford to pay Irish farmers will be largely unaffected by the Wyeth closure and the global downturn in the infant formula market.