IRELAND – Before 2020, Ireland will become the fastest growing dairy economy, which will come as a big change from the largely ‘static’ milk production seen across the European Union since 2003, say analysts at Dairy Ireland.
This prediction is forecast in anticipation of post-2015 milk quota removals which Dairy Ireland expects to pave the way for great innovation and investment as farmers maximise grass based milk production systems.
No longer ‘tethered’ by milk quotas, Irish milk needs to be targeting dairy demand areas that have been accessed by New Zealand and Australia while EU production has been restricted, the association stated in its monthly report.
But, much damage has already been done to EU competitiveness on the world scale. Between 2000 and 2011, the global dairy market share of the EU shrunk by one third while New Zealand milk production rose by 4 billion litres.
This means that New Zealand has grown to match the EU’s share of the global market with US presence more than doubling to 12 per cent.
Some concern exists around Ireland’s readiness for transition into a more open market environment. Through the 1990’s and into the new millennium, up to half of key dairy commodities were sold into intervention.
This puts Ireland at a disadvantage, according to Dairy Ireland analysts, who say that Holland and Denmark sold less than 25 per cent of key commodities into subsidised markets during this period. This is expected to stand these european competitors in good stead when returning to non-subsidised market systems.
Irish expansion will be driven through product innovation and adding value, this is the clear message of Dairy Ireland.
Russia is the biggest importer of both butter and cheese in the world and China is catching up. Last year Chinese dairy imports rose to 1.3 million tonnes with cheese imports increasing by over a third.
Now the world’s largest importer of milk powders, China heads a group of six key countries for milk powder imports consisting of Indonesia, Algeria in second, the Philippines, Mexico and Brazil.
However, the Association stated that tapping into these markets represents a challenge because of the already established global presence of New Zealand and the US.
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