Some people running large farms are leaving the dairy business because of the shortage and cost of labour, the chairman of the Irish Dairy Board (IDB) said yesterday.

Mr Tom Cleary, who was speaking at an Bord Bainne's annual review, said some farmers were bringing in milking experts from New Zealand to milk their cows to alleviate the situation.

It appeared, he added, that young people did not want to work in the industry because it involved a lot of weekend work and even farm apprentices were more interested in beef and mixed farming.

"Up until recently, 90 per cent of apprentices wanted to work on dairy farms but that trend has now been reversed. We now have to look seriously at importing labour to cope with the situation," he said.

Mr Cleary, who is an extensive dairy farmer, said he knew of one farm where a New Zealand worker, his wife and four children, had come to Ireland to live and work.

"They tell me that they can earn much more money here than there and that there are less animals to milk. Other farmers have already brought in New Zealand workers," he said.

Dairy farmers' children, he said, in some cases did not want to work the family farm and managers were demanding upwards of £25,000 (€31,743) a year to manage dairy farms.

He said that this situation was likely to continue as long as the economy remained as it was.

Dr Noel Cawley, the managing director of the IDB, said that dairy production in Ireland increased across all categories, except in skim milk powder. Butter was up by 1.5 per cent to 133,000 tonnes.

Cheese production grew 5.4 per cent to 97,000 tonnes. Casein volume registered a 14.3 per cent increase to 48,000 tonnes but skim milk powder production was down 12 per cent on the previous year.

Eventually, he said, a total of 94,000 tonnes were put into intervention, of which Ireland accounted for 26,190 tonnes which was 12,500 tonnes fewer than the previous year's level.

However, he added, since August, SMP prices had strengthened and stocks have had to be purchased from intervention to supply the calf milk replacer industry.

Dr Cawley said sales of butter had been badly hit by the collapse of the Russian market in 1988 but sales of Kerrygold butter inside the EU, especially in Germany and the UK, had held up well. In Germany, there was a 10 per cent increase to more than 30,000 tonnes.

He said he thought milk prices would remain fairly stable in the new year, with the board continuing to use intervention to support the price when necessary.