The National Milk Agency (NMA) has warned that a declining supplier base of specialist liquid milk producers poses a risk to the fresh milk sector.

The warning comes as just 297 suppliers accounted for over half of the contracted year-round liquid milk supplies in the 2022-23 milk year, according to the agency’s latest report.

One in every 14 dairy farmers in the country supplied liquid milk to processors under registered contracts last year and these supplies accounted for 10% of the country’s overall milk pool.

This was a 5% fall on the previous year, representing a drop of 58 liquid milk suppliers, while a further 49 suppliers have exited the fresh milk sector in 2023-24.

There are now only around two-thirds of the contracted fresh milk suppliers that there were when the NMA was established to regulate the supply of milk for liquid consumption in 1995.

Contracted liquid milk suppliers’ October to February volumes were back to 404m litres in 2022-23, a decline of 7% on the previous year’s supplies. It was their lowest level in the agency’s almost 30 years of reporting.

This reduction in domestic volumes came as bulk and packaged fresh milk imports from Northern Ireland increased to their highest levels since the agency was established, reaching 168m litres in 2023. This was the equivalent of 29% of all fresh milk consumed in the State.

“The agency notes with concern the continuing decline in the number of registered producers and in their annual milk supplies,” NMA chair Denis Murphy said in the recently published 2023 report.

“Many traditional long-term registered producers are exiting the fresh milk supply chain and are not being replaced.”

Murphy raised concerns of the impact of a further reduction in nitrates derogation stocking rates on the economic sustainability of fresh milk suppliers, stating that the move to 220kg organic N/ha in most areas will have “a transformational impact” on profitability.