The abolition of milk quotas in 2015 was heralded as a new dawn for not just Irish dairy farming but the entire farming and agriculture sectors. Existing farmers expanded, young farmers entered dairying for the first time and beef and tillage farmers reared heifers. All facets of farming here were set to benefit.

However, milk price has dipped, leaving a sour taste in the mouths of some farmers. Price has fallen as a result of overproduction as well as weak purchasing from countries like China.

Jack Kennedy and Patrick Donohoe spoke to farmers at home and abroad to get their views on Irish dairying one year on from quota removal.

Seen all stages of quotas

Seamus O’Reilly from Cornafean in Co Cavan has seen it all in dairying. O’Reilly has been through all stages of the quotas and now, in semi-retirement, farms with his son, Eamonn.

While very much against the reintroduction of quotas, O’Reilly said they served a purpose at the time.

“You have to remember where we were 30 years ago. We had butter mountains and we couldn’t shift product and quotas served as a way of stabilising markets,” O’Reilly said.

“It’s disappointing to look at prices but the established herds should be fine. I have lot of sympathy for young people who invested heavily in getting into dairying. There was a sense out there that if you weren’t dairying, you weren’t a proper farmer and I didn’t like that,” O’Reilly said, before adding that he is totally opposed to quotas returning.

  • Seamus O’Reilly farms along with his son Eamonn in Cornafean, Co Cavan. They have approximately 100 cows. Seamus was milking 60 cows when quotas were introduced.

    • New entrant taking long-term view

    Philip Ruttle joined the dairy industry four years ago to be able to provide enough income for himself and his parents. This year, Ruttle plans to milk around 75 cows and over time he plans to increase this to 90 milking cows. How fast he gets to 90 cows will depend on income and Ruttle is under no illusion that capital investment is front-loaded in the dairy enterprise, so if prices stay low he might not get there too fast.

    He said: “I’ve a figure for debt in my head of €2,000 per cow and I feel this is enough so that the business is not at risk. I still need to push on for a better future which includes more milk solids and more numbers but more numbers may have to be postponed in the short term if the income is not there.”

    Has the global downturn in price coloured his vision on the future of the dairy industry? No is the simple answer.

  • Philip Ruttle is farming with his father Brian near Rathkeale in Co Limerick. Philip started dairy farming four years ago and this year has joined the Teagasc Kerry Monitor farm programme.

    • Major rethink on New Zealand milk

    Milk price forecasts are as low as they have been for 10 years in New Zealand. Dairy farmers, including Monaghan native Olin Greenan, will start drying off cows in one month’s time in the North Island but very good weather for grass growth means there is a lot of feed on most farms keeping milk supply up in the short term.

    Milk price is currently between 17c/litre and 18 c/l and cost of production is closer to 24c/l and 25c/l once all costs are tallied, so repayments on loans, etc, will not be made this year on many farms. Farmers are reacting by reducing purchased feed, and freezing any investment in buildings and infrastructure. Nationally, milk supply is expected to be down 4% for the year but in some regions, supply won’t be back at all relative to last year despite the price cuts.

  • Olin Greenan is originally from Monaghan but is now dairy farming in a sharefarming business model with his wife and two kids, Noah and Jack, in the North Island of New Zealand.

    • Big price difference in UK

    Non-contracted UK dairy farmers are suffering producing milk for below the cost of production for the last 12 months. There are no prospects for any price rise soon but many producers, if they have the option financially, are producing more milk to try to dilute costs.

    Scottish dairy farmer Brendan Muldowney (Kilkenny) suggests UK farmers will get some leeway from banks as they are well secured relative to some other parts of the world. Long-term, Muldowney believes if Irish farmers are globally competitive they can withstand a period of low milk prices but they must be competitive globally, not just locally.

  • Brendan Muldowney, originally from Kilkenny, is dairy farming in Dumfries, Scotland, in a seasonal grass-based milk production system supplying Lactalis.

    • US tools to manage volatility

    Missouri-based Niall Murphy maintains many US producers are suffering with low milk prices at the moment. While the US has had much higher dairy commodity prices compared with other milk-producing nations until recently, he suggests some high-cost producers are losing up to 4.5c/l.

    Murphy also suggests that US dairy farmers have benefitted from the exceptionally high US beef prices for the last two years but these are now back to more normal levels and hence income from stock sales will be down for many US producers. Financial tools such as forward purchase of feed and forward selling of milk are helping US dairy producers maintain small margins.