The future of Irish dairy growth lies in value rather than volume, with the milk pool forecast to remain "broadly static" according to the Irish Co-operative Organisation Society (ICOS).

Edward Carr, president of ICOS, today (Wednesday, June 3) issued a stark warning that Irish agriculture and the co-operative movement are "entering a period of profound change".

Speaking at the 131st ICOS AGM in Portlaoise today he warned that this outlook for the sector will "require greater strategic collaboration, innovation and long-term thinking if Ireland is to remain competitive".

"With Ireland's milk pool expected to remain broadly static in the years ahead, the sector must focus on extracting greater value, improving efficiency and strengthening competitiveness," Carr detailed.

He pointed to recent analysis from Rabobank which outlined consolidation trends and a forecast decline in EU milk production.

According to ICOS this consolidation is being driven by tightening environmental and climate regulations, land use constraints, rising input costs and also because of "an ageing farmer population".

ICOS

The president of ICOS said in light of this for Ireland, as a major global dairy exporter, "maintaining competitiveness will be critical".

Carr said structural pressures "will accelerate consolidation across European dairy processing as tighter milk volumes drive processors to seek scale, secure supply, improve efficiencies and manage volatility".

“This necessitates an open-minded approach to enhanced co-operation across the sector, including joint ventures, shared services, strategic partnerships and other collaborative initiatives that can help co-operatives achieve scale, reduce costs, develop new markets and better manage volatility.

"Our co-operative model has always been built on collaboration and there is significant scope for the sector to work together in new ways that strengthen farmer returns and safeguard the long-term future of rural communities," he added.

Among the other key themes that came under the spotlight at the ICOS AGM today included the future of the Common Agricultural Policy (CAP), the Carbon Border Adjustment Mechanism (CBAM) and food production.

A long-term nitrates derogation was also highlighted as "critical" for the dairy sector and wider Irish agri-food economy.

But according to Carr "generational renewal remains one of the greatest challenges facing Irish agriculture".

"We cannot take the next generation of farmers for granted. Young people will only commit to farming if they can see a viable future, a reasonable income and a supportive policy environment.

“It is disappointing that the Government has not yet seen fit to introduce a farm income stabilisation scheme. This would help farmers to manage income volatility, improve financial resilience and reduce reliance on emergency Government supports during market downturns," he added.