Belfast Telegraph

Northern Ireland farmers chewing the cud over the end to EU milk quotas

Dairy producers fear change will lead to oversupply and heap further pressure on prices

By Jamie Stinson

Dairy farmers in Northern Ireland wake up to a new era today as they are released from milk quota restrictions.

But one farmer warned that the lifting of the 31-year constraint will cause "trepidation" among producers in the region.

The first limits on milk production were introduced in 1984 when excess supply built up in the late 1970s, leading to so-called "milk lakes and butter mountains".

The scrapping of the system is a boost to producers in the Republic of Ireland who - buoyed by the weak euro - are looking to increase p roduction and gain a larger share of world markets.

There are also fears that the lifting of constraints to supply could further push down milk prices. Prices for Northern Ireland producers were down 6% in 2014 to 29.7p per litre - though the volume of milk produced shot up to a new high of 2.2bn litres.

Production in the Republic is expected to rise by 50% over the next five years as it looks to compete with New Zealand, the largest producer in the world.

In Northern Ireland, the dairy industry is made up of over 3,000 farms, has a gross turnover of £1bn and employs over 2,000 people.

Will Taylor, dairy farmer and owner of Glastry Ice Cream in Kircubbin, Co Down, said: "Virtually everyone in the industry in their living memory has seen constraints in milk production, and for the last 30 years this has been milk quotas.

"I feel there is quite a number of unknowns. There is no restriction on production in the EU, but equally the EU has not put in place any fall-back cushion if mammoth overproduction takes place."

Mr Taylor said falling prices were a problem. "As a working milk producer I have seen milk prices plummet by 40% in the last 12 months," he said. "The Russian ban on imports from the EU and China stepping back have thrown the whole market over the last 12 months.

"No milk quotas is now a scary idea with nothing to fall back on. I think a lot of milk producers will be looking to the future with some trepidation."

Ian Marshal, president of Ulster Farmers' Union, said he believed Northern Ireland dairy farmers were ahead of their counterparts in Britain because of their export experience.

"I feel we are in a position to further develop this presence as long as we tackle price volatility," he said.

But he said the union had concerns about the lack of measures to tackle volatile prices.

It is looking at measures such as fixed-price contracts, futures pricing and a margin protection programme.

David Dobbin, chief executive of Dale Farm Group - one of Northern Ireland's biggest dairy producers and exporters - said our farmers will lose an advantage when quotas end.

"While farmers in other EU countries couldn't grow because of milk quotas, here in Northern Ireland our local milk supply has increased by over 50% during the era of milk quotas as we were able to use spare quota from Great Britain," he said. l

Agriculture Minister Michelle O'Neill said the future depended on market conditions. She urged the dairy industry to pursue a "market-led strategy" and to make future decisions in the context of input costs and market returns.

Belfast Telegraph