Chairman’s Statement

Eamonn Carroll

Chairman

2020 was a year of true uncertainty and an extremely challenging year for all industries due to the global pandemic and the dairy industry was no different. Our dairy sector and our member co-operatives showed great resilience in navigating the huge challenges of 2020.

Global performance

Despite this, Ireland’s dairy sector again exceeded other food sectors as a pillar of Irish food and drink exports. Irish dairy exports exceeded €5bn for the second consecutive year in 2020 securing its place as Ireland’s largest export food category. Further expansion of the Irish milk pool is forecast in 2021 combined with growing demand for dairy in global markets. Sustainability considerations are evolving and changing dietary habits are impacting the future of food. Irish food and drink exports for 2020 were worth €13bn, a 2% decline on the 2019 figure. This slight decline comes in the context of the largest disruption to normal market operation globally since the end of World War II.

Dairy markets proved resilient throughout the pandemic, aided by buoyant cheese and butter retail sales and strong demand for milk powders. Outstanding retail sales helped to offset the decline in foodservice with demand stronger overall. Global milk supply increased by 1.7%, which saw stable European farm-gate prices. Irish milk price saw a marginal increase above 30 cent per litre. Looking to 2021, global milk output is likely to continue growing, which will increase the supply of product to global markets, particularly from the US. Volatility in global markets is likely to be a feature of 2021 as regional lockdowns dictate demand. Purchasing power in key economies will also be a factor as we prepare for the economic impact of the removal of Government stimulus programmes in key markets, particularly in the US. Globally, higher feed costs and environmental considerations will impact supply.

Dairy markets proved resilient throughout the pandemic, aided by buoyant cheese and butter retail sales and strong demand for milk powders.

Dairy business with the UK was sustained throughout 2020, despite Brexit trade negotiations injecting uncertainty into trade with our largest trading partner. In late December a Trade and Cooperation Agreement was struck between the EU27 and the UK removing the risk of immediate imposition of tariffs and quotas in 2021. Decline in demand because of Covid-19 restrictions and job losses drive the 5% decline in the value of exports to the UK while exporters made contingency plans for a no-deal Brexit. This included extensive participation in customs readiness schemes developed and delivered by Bord Bia alongside entire supply chain assessments and customer engagement in the UK.

Sustainability

Together with every other sector of Ireland’s economy and society, dairy farmers like myself and producers have an important role to play in helping Ireland meet the very ambitious emissions targets set by the Government. Ireland’s 18,000 dairy farmers are responding to the climate challenge, taking actions large and small to reduce their carbon footprint, improve their sustainability and protect the biodiversity on-farm whilst also delivering nutritious food for Irish and international markets and ensuring ongoing economic viability for family farms.

There are also many exciting developments beyond the grass and soil that dairy farmers are embracing, including a focus on the Economic Breeding Index (EBI) of their herd to make it as efficient as possible, as well as the roll-out of solar panels and energy efficient systems on-farm.

Irish dairy farmers are also continuing to play a central role in protecting and improving our precious rural biodiversity, planting native hedgerows and trees, offering pollinator patches for bees and wasps, and by protecting watercourses via the ASSAP scheme. While it is heartening to see the work being undertaken by dairy farmers across the country, there is more to be done. The next step is to mainstream all these actions – which taken together can have a really significant impact on farm emissions – onto every dairy farm across the country. Up and down the country, experts from the Department of Agriculture, Food & the Marine, Teagasc, co-operatives, and industry associations are standing ready to assist famers to implement these proven actions on their farms. And, as always, we are seeing farmers talking to and teaching other farmers on sustainable methods – something which even has continued throughout the Covid-19 pandemic with the use of technology, even as many other industries have been halted. Ireland’s 18,000 dairy farmers are responding to the climate challenge, taking actions large and small to reduce their carbon footprint, improve their sustainability and protect the biodiversity on-farm...

NDC work programme

I would like to acknowledge and thank our members for their continued support, which ensures the longterm success of NDC dairy marketing campaigns and initiatives. It is essential that the NDC takes a leadership role in promoting the overall benefits of dairy in our diet as well as continuing to promote and protect the reputation of the dairy industry which is more important than ever before as we face increased international competition and global challenges.

The National Dairy Council remains fully committed to delivering value and playing an important part in helping the Irish dairy sector to unlock its full potential. On behalf of the Board, I would like to thank our CEO, Zoë Kavanagh and her Executive Team for their dedication and commitment to the work of the NDC during the extreme challenges posed by the global pandemic in 2020, they delivered an excellent work programme on behalf of the sector.

Eamonn Carroll

Chairman