The Irish dairy industry has fared well in 2004 despite predictions that it was going to be a difficult year, the Irish Dairy Board said yesterday.

Despite the cut in supports for the industry by the EU Commission, Irish farmers continued to receive more or less the same price they had got the previous year for their milk and they also got compensation for the expected fall which did not take place.

At board level, managing director Dr Noel Cawley said there had been a good performance in difficult trading conditions. "While the figures are not yet complete, I expect we will be reporting an increase in turnover on last year's record, a small increase in profit and a further reduction in our debt to equity ratio," he said.

Dr Cawley said the board hoped to pass back a bonus of between €14 and €15 million to its co-operative members to support the milk price.

The board had paid €100 million in annual bonus over the past 10 years, he said.

He said that in the UK market he expected turnover to be up by between 5 and 10 per cent and in the US turnover would probably be up by 15 per cent.

Branded Kerrygold sales in the United States were up by 25 per cent, he said.

Dr Cawley said that it was virtually impossible to predict what might happen next year but he believed that the product mix in Ireland, for which Ireland had often been criticised, had been beneficial in 2004.

"2005 may prove more difficult than 2004 for the export marketing of dairy products," he said.

"Prices have not yet fallen to the level the Commission considers appropriate and we must remember that another 6 per cent reduction in support prices is due next July."

The recent weakening of the dollar against the euro coupled with the continuing European Commission policy of reducing export refunds were presenting problems for dairy product sales in overseas markets, he said.

However, he was optimistic that the dollar could not continue to trade at current weak levels, which would change the equation.