Dairy sector set to milk more profits

It seems the only way is up for the dairy sector if the export figures released by Bord Bia yesterday are anything to go by. There was a 15 per cent increase in the export of dairy products and ingredients last year, bringing the category value to more than €3 billion for the first time.

The strongest performing product categories were butter, cheese, infant formula, milk and cream, whole milk powder and whey. But we have the weather to thank for some of this increase. Bord Bia chief executive Aidan Cotter (right) noted that global supplies were tight after New Zealand suffered the worst drought in 75 years and weather-related events in other parts of the world affected production.

The strong growth in demand was led by China. "In the second quarter of last year alone, China imported 27 per cent more dairy products and ingredients than it did in the previous 12 months, a massive surge in growth," he said.

He also noted the “star performer” in the prepared foods category was fat-filled milk powders, which accounted for 80 per cent of the export growth in the category.

And all of this is before milk quotas are abolished next year and farmers can produce as much milk as they like for the first time in 30 years. According to Bord Bia’s outlook, the prospects for dairy exports this year are broadly positive “with global demand likely to help clear any increase in output to keep prices well ahead of historical averages”.

With so much good news to dispense yesterday, it was a good day in the office for Cotter. While total merchandise exports fell by more than 6 per cent in the first 10 months of last year, food and drink exports increased by more than 8 per cent in the same period. By the end of the year, food and drink exports were tipping €10 billion for the first time. And it got better when it came to questions from the floor after he and Minister for Agriculture Simon Coveney spoke.

European Supermarket Magazine editor Kevin Kelly said Bord Bia was doing fantastic work and needed more money to do its job. He repeated his thesis several times. Coveney sang Bord Bia's praises while talking about budget constraints. Cotter looked very happy indeed.