Evolution of Ireland’s dairy product mix

Published 1 March 16

The growth in milk production in Ireland is expected to increase its exposure to powder commodity markets. According to the Irish Farmers Journal milk powders are expected to increase their share of the product mix from 10% in 2014 to 33% by 2020. The majority of investment by processors in recent years has been in drying capacity. This suggests the investment has been supply-led to deal with extra milk, rather than demand-led to deliver a customer solution.

Ireland product mix 01/03/16 

In the past Irish milk prices were largely determined by international cheese and butter prices, these products along with liquid milk have historically accounted for more than 85% of Irish dairy production. However by 2020, these products will become less important in the overall product mix with their combined share declining to 65%.

The extra production is also expected to result in an increase of trade with countries outside the EU, rising by 20% to 47% by 2020. The increased focus on powder production and exports will mean the Irish dairy sector will become more exposed to international markets in the future.