International dairy consumption set to outstrip production

Global consumption of dairy products is set to increase by 2.3% per annum over the next decade with output increasing by 1.8% during the same time period.

This was one off the key messages delivered to delegates attending this week’s Alltech’s annual symposium in Kentucky.

The coming years will also see milk exports from the EU to the rest of the world increasing significantly.

“All of this is good news for milk producers in Ireland,” confirmed Alltech’s vice president for Europe Pat Charlton.

“Supply and demand factors should ensure a long term strengthening of international dairy markets. But I also recognise the downturn in prices that are impacting on milk producers at the present time.

“And it may well take until 2016 before the dairy sector puts in place an effective response to the factors that are causing such tremendous volatility within the industry.”

But Charlton said this does not mean that prices will remain in the doldrums for this entire period of time.

The reality is that nobody is in a position to predict how the market will react with any degree of certainty over the coming months.

Charlton admitted that a sustainable dairy farming sector must be made a cornerstone of the milk industry’s development plans for the future.

“The current figures indicate that both very large farms and smaller family run-businesses are managing to survive the current rigours of the market best,.

“But it is the farmers in the middle, who are finding it most difficult to drive greater levels of efficiency within their businesses. As a consequence, they are being stretched to the greatest degree by the current downturn in prices,” he said

Charlton pointed out that adding value is another way for farmers and processors to buck the current downward trend.

“An excellent example of this is Naturally Enriched Milk innovations, or NEMi, which is currently supplying selenium enriched milk to schools and shops in the north west of England.

“On the back of this initiative the supplying farmers are currently receiving a significant rise in their monthly milk prices,” he said.

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