Many dairy farmers within the European Union (EU) feel as if they are being encouraged, or pushed by policy, to produce less milk.
Ireland has seen the introduction of banding under nitrates legislation, which many farmers see as being a new form of quotas for dairy farmers.
Across the western world we are seeing increased demand for non-dairy alternatives, however there are other parts of the world where demand for dairy products continues to grow.
Unsatisfied demand for milk
Environmental constraints or policy is likely to lead to a reduced milk output from the EU and New Zealand.
Speaking at the DSM event at the Killashee Hotel in Naas, Co. Kildare, John Allen from Kite Consulting said this will lead to a decline in dairy exports towards 2030.
Commenting on environmental constraints/policy and its impact on dairy exports, Allen said: “The policy-makers are setting us on a track to actually produce less for export and yet when you look at dairy importers, they won’t be generating more milk themselves.
“They are not well equipped to produce more dairy, yet they value dairy nutrition – they want to consume more dairy.”
Commenting further, he said: “But when you factor in their 2% growth, which has been long-term growth, then you can see their demand in the market is set to increase.
“When you put those two things together you end up with what we call unsatisfied demand. That actually means we are increasingly more into a world that will be short of dairy to the tune of two UKs.
“The world market wants to consume 88 billion litres by 2030, but it will only produce 50 billion litres for export.
“So in that world there is very little alternative except that prices will increase,” he explained.
UK government policy
Moving to talk about the policy of the current UK government, Allen explained that the current policy of this government is to produce more milk.
“The climate change commitment in the UK recommends that we consume less dairy products in the UK.
“But they are not opposed to the UK producing more dairy; the official policy of the English government is that we should produce more dairy in the UK and we should export it.
“The policy in the UK, it totally varies to the policy of the EU; this illustrates that we need to use science, logical arguments with policy-makers to try and influence them.
“I think we are trying to do that in the UK, so we end up in a positive place for our industry – but also the best thing, we will be feeding the world.”
