As the winners of the National Dairy Council and Kerrygold Quality Milk Awards were announced on Wednesday, the quality over quantity debate at farm level was clearly on show.

The Hearne family from Waterford have been breeding for better fertility and better milk solids for years.

The same argument holds true for the article reporting on the Niall Matthews farm walk.

Last week, Niall outlined to a group of farmers from Northern Ireland how he has selected specifically for increased milk solids and better fertility to drive better per-cow performance. He is reaping the rewards because his processor, Lakeland, has sent him clear signals on what it requires and he has responded.

This argument for better quality rather than quantity builds into the whole debate on how far away the next quota is for Irish dairy farmers.

Is it likely that there will be some form of a quota or cap on numbers or production at some stage in the future? Already land availability is limiting production from some farms, with labour availability the limiting factor on others.

Exactly what the quota or limit would look like is unclear. It could be environmental, head count or emissions – who knows. It is likely much will depend on what happens in other sectors.

The grain prices announced in the last 10 days won’t do much for confidence or investment in that sector.

At industry level this week we saw the biggest co-op in New Zealand, Fonterra, come clean to its suppliers on where it sees the future (see Eoin Lowry's report).

The policy of conquering the world looks to be taking a back seat while Fonterra returns to a model of adding value rather than volume. Its stated ambition now is to “focus on key categories that deliver superior value” rather than the mantra up to now, which has been clean, green commodities at scale.

Fonterra has returned a price similar to Ireland for the last three years. That’s no small ask given that 15 years ago they were receiving half our price

Again, in its new strategy, Fonterra talks about investments where it will have a competitive advantage. While broad, it builds into value rather than volume. It is fair to say Irish dairy businesses have been talking about this for a long time. The Fonterra balance sheet write-downs, share price falls and the lost profits are coming at a time when dairy farmers of New Zealand are very busy as milk production ramps up.

Milk supply in New Zealand is up 2% year on year to date so farmers are happy. Fonterra’s milk price hasn’t been hit and this is going some way to rewarding the loyalty New Zealand farmers are showing the business. For the last three years, Fonterra has returned a milk price similar to what many Irish farmers have received. That’s no small ask given that 15 years ago they were receiving about half our price.

There are questions to be asked of the farmer representative structure in New Zealand – the shareholders council (elected representative structure). They have been labelled by some commentators as a group of non-critical onlookers of the inner board as developments have unfolded over the last few years. Responsibility rests with the directors of Fonterra.

The same responsibility and strategy direction holds true for Irish co-op directors as they look to broaden the sales platform for premium Irish products into far-flung places.

These are very interesting times in New Zealand and it’s fair to say as a country it has reached the limit in terms of dairy cow numbers.

All dairy farmers now must look to increasing the value of milk delivered rather than delivering more milk.

The other big change in New Zealand has been the shift from interest-only loans to the current situation where the mainly Australian banking sector is demanding principal and interest repayments as a given. The differences in some of the competitive advantages are narrowing.

Congratulations to the overall NDC and Kerrygold winners from Waterford, the Hearne family, on what is a well-deserved victory and a thoroughly refreshing account of why adding value pays day after day.

European Commission: changing of the guard in Brussels

Janusz Wojciechowski, the nominee for the role of European commissioner for agriculture. \ Law and Justice Flickr

After a less than inspiring performance before agriculture committee MEPs in Brussels this week, Janusz Wojciechowski, the nominee for the position of commissioner for agriculture, was awaiting confirmation as we went to press.

The big ticket item for the incoming commissioner is finalising the CAP reform. Any Polish commissioner will have a strong focus on convergence of payments between east and west, as well as further move to land- or area-based payments. Farmers will also have noted with concern his reference to Ireland and expression of a preference to live exports in his interrogation.

Meanwhile, outgoing commissioner for agriculture Phil Hogan had a seamless move through parliament and is confirmed as the new European commissioner for trade.

Now that he will be in the driving seat for future trade negotiations as well as implementation of existing deals, Hogan will still have a major impact on Ireland’s and the EU’s farmers.

Austria has already expressed opposition to the Mercosur deal and getting it approved by the European Parliament with its huge green influence will be difficult after this summer’s Amazon rainforest fires.

Notwithstanding the Mercosur deal, Irish farmers are better served with an Irish commissioner in the senior trade portfolio, especially one that has served his time in the agriculture portfolio before.

The Irish Farmers Journal wishes Commissioner Hogan well in his new role, but will be holding him to account over the next five years for delivery of his commitments on replanting 1m hectares annually of the Brazilian rainforest, the €1bn market disturbance fund and safeguard tools if the Mercosur deal is approved.

Tillage: grain prices show the need for sectors to work together

Over the past week, we have seen most buyers of grain announcing prices which are down more than 25% on last year, with base feed barley prices in the range of €128-140 per tonne. This is the equivalent of €3.50/kg for beef or less than 23c for milk if they were to take a 25% cut –much of it blamed on the vagaries of global commodity markets.

While Ireland is far from self-sufficient in grain, tillage farmers could easily supply the needs of our two largest sectors – beef and dairy – with a quality locally sourced Irish product.

This would provide opportunities for a closed-loop, differentiated, high-value, sustainable supply chain in both dairy and beef products, while also enhancing the viability of the Irish tillage sector.

We have to start somewhere to protect and guard the reputation of what we produce on Irish farms

While this may seem an ambitious goal, we have to start somewhere to protect and guard the reputation of what we produce on Irish farms.

Ireland has developed a premium image for its food industry under the Origin Green label. However, excessive reliance on imported protein and grains is a potential threat to that image.

Developing greater protein crop production in Ireland would allow the industry to substitute away from imported products currently used by feed manufacturers.

This would benefit the animal sectors, while aiding the marketing of home-produced, traceable, non-GM product.

Brexit: UK proposals have no benefit for farmers

The latest proposals by the UK – even if accepted by the EU – offer no comfort to farmers either side of the Irish border or in Britain. Maintaining the value of the UK market requires both alignment of standards and tariffs. Proposing an island of Ireland arrangement for agriculture may technically enable trade to continue but without a customs arrangement that includes all of the UK with the EU, it is worthless. Farmers across Ireland and the UK need the value of the market protected and that can only be achieved with a customs and tariff alignment, otherwise the market will be flooded with non-EU imports given the UK’s no deal proposals.