As revealed by the Irish Farmers Journal last month, the milk surge that followed the abolition of quotas after 1 April 2015 is now abating.

While April 2015 saw a jump in production, with 784.3m litres collected, supply is not as high this year, with 752.1m litres recorded by co-ops last month.

This, however, was almost exactly compensated for by a 32.7m litre increase in the amount of raw milk imported from outside the Republic.

At 4%, fat content was the best recorded in April in the past three years.

Liquid milk and butter production increased by nearly 10% compared with April last year.

Since the end of quotas, Ireland has had the largest percentage increase in milk intake at 18.5%, the CSO reports. However, the EU’s 10 largest dairy countries were responsible for 86% of the increased milk supply.

Ireland is currenlty the EU’s 12th largest milk producer.

Rebalancing of dairy markets

Following the release of these statistics, IFA dairy chairman Sean O'Leary sent out a reminder that April 2015 supplies were boosted by some carry forward from the previous quota restricted month. That said, we are witnessing slowing growth in many of the EU's main milk producing countries, and other milk production regions around the world, he said.

"The reduction in the Irish April 2016 output also reflects the late and cold spring which saw poor grass grows, and many cows return indoors for at least part of the day. The bad spring was a factor in quite a number of Northern Europe¹s regions, but affected most of all the grass-based farms in Ireland and parts of the UK. There is also little doubt that the fact that most European farmers are now producing at a significant loss is also starting to affect output growth," O'Leary said.

Danish milk collections were up 8.9% in March, but only by 2.7% for April, according to IFA. Meanwhile, French milk production was down 1.1% in March and is predicted to be back 3.6% for April, with slower growth also evident in Germany, up 0.3%. O'Leary also said that UK output has been falling since February, with deliveries down 2.3% for the two weeks ending 21st May 2016.

"New Zealand is finishing their 2015/16 season with 3% or so less milk produced than in 2014/15, and Australia is 1.1% down for their season to April. Only the US output seems to be buoyed by low feed and labour costs, with USDA reporting 1.2% increase in April output.

"Bearing in mind that spot milk and dairy prices, EU average quotes and international futures have all been firming ­ albeit timidly and from very low levels ­ it is fair to think that we are seeing the first signs that global supply and demand has slowly started to rebalance," he concluded.

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