IFA National Dairy Committee chairman Sean O’Leary has said that with weaker dairy markets just months before the end of the quota regime, it is crucial that farmers intending to enter dairying or expand their enterprise would plan based on realistic assumptions about profitability.

He added that dairy farmers in the post-quota era would need support to become better businessmen and financial planners. He said the dairy industry, financial institutions, the government and Teagasc must all play their full part to help farmers manage their single biggest challenge for the coming years: margin volatility. “I am heartened by the enthusiasm among dairy farmers. In the context of strong global demand growth linked to solid demographic trends, and our real ability to produce high-quality milk and dairy products sustainably for the global market, I believe it is truly well placed,” O’Leary said.

“But I am also mindful that market volatility can knock down fragile farmer confidence just as much and as quickly as their incomes. We are getting a further taste of volatility, due to the short-term imbalance between global supply and demand. Furthermore, while we trade too little with Russia for the current export ban to affect us directly, it is an additional destabilising factor for global markets,” he said.

“I believe the industry, led by the Irish Dairy Board, must offer milk price and input hedging solutions that farmers can opt for. Banks must also be creative in their investment product offerings and be particularly responsive to the short-term cashflow challenges during the changeover period. Crucially, our Government must support the IFA farm taxation proposals on co-ops’ development plan contributions and on managing volatility,” O’Leary concluded.