There were celebrations around Ireland last night as the milk quota system formally ended. Under the quota system, if you exceeded your quota, you were charged 28c for every litre over the quota. This is a historic for Ireland, especially with our success in the global milk powder market to capitalise on huge global opportunities.
Should I buy a cow?
The answer, based on the evidence at hand, is a definitive yes. The average herd size in Ireland is 60. It is reckoned that the average herd size will have to increase to 120 to meet future demand. If you are already in the dairy sector and are fortunate enough to have already invested in a milking parlour, the argument is even more profound to increase your herd size as your fixed costs will remain the same.
When New Zealand’s milk quotas were abolished it managed to quadruple its milk production and is now a major player in the global milk market. Ireland, with its unique topography of limestone, which increases the quality of the grass leads to a quality of milk which is amongst the best on the global market.
With Glanbia opening one of the largest dairy processing plants in Europe, in South Kilkenny: Kerry making a huge investment in its Charleville plant to produce infant formula and 36 Irish creameries being granted access to supply the Chinese market (six times more than the New Zealand allocation), the timing is ideal to invest in a cow, or even better a dairy herd.