Ireland will resist EU pressure to cut milk output, says Minister

Minister for Agriculture Michael Creed said Ireland would resist mounting EU pressure to scale back its milk production at this week's Farm Council meeting in Luxembourg. The Republic has been singled out as one of the chief drivers of overproduction in Europe, which is now blamed for the current turmoil in dairy markets.

However, Mr Creed said the “finger-pointing at Ireland” was entirely unjustified given the country accounted for 4 per cent of production in Europe and 1 per cent globally.

The latest statistics show the industry here increased output by 18.5 per cent to 6.5 billion litres in the first 12 months since the ending of milk quotas in April last year.

Germany and France, Europe’s two largest producers, recorded more modest output increases of 3.7 per cent and 1.3 per cent, but their production footprints, at 31 billion litres and 25 billion litres respectively, dwarf Ireland’s output.

Compulsory cuts

The Government has resisted restricting supply fearing Ireland, so long the under-achiever in the global milk market, would cede ground to rivals.

Mr Creed said that with the exception of the one dairy lobby group, the Irish Creamery Milk Suppliers’ Association (ICMSA), there was no appetite in Ireland to go down the route of voluntary or compulsory cuts in production. Germany, France and Poland are expected to propose new measures, including supply controls, at this week’s Farm Council meeting aimed at rebalancing the market, amid a near 40 per cent drop in global milk prices since 2014.

The three countries agreed a joint position at a crisis meeting in Warsaw earlier this month and are likely to call on the European Commission to fund voluntary supply cuts at local and national levels.

Income support

Two recent Global Dairy Trade auctions posted modest price increases, prompting suggestions the market may be finally bottoming out, the latest auction in mid-June recorded no change in price. Despite the introduction of several income support measures, several large Irish processors have been accused of short-changing farmers on price.

A recent survey by the Dutch Dairy Board found Irish dairy processors, Glanbia, Dairygold and Kerry, were paying the lowest prices for milk in Europe.