Irish dairy industry worth €17.6 billion to the economy

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Irish dairy industry worth €17.6 billion to the economy

Irish dairy industry worth €17.6 billion to the economy
November 01
11:51 2023
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Dairy Industry Ireland (DII), the Ibec association representing the sector, has unveiled a new comprehensive report that highlights the substantial economic contribution, global market potential, and commitment to sustainable practices of the dairy industry. Conducted by EY, the report, titled “Economic Contribution of the Dairy Processing Industry to the Irish Economy & Processor Forecasts to 2030,” has been submitted to the government for their consideration.

Historically recognised as a rural economic powerhouse, Ireland’s dairy sector has evolved into a remarkable contributor to the nation’s economy, with €17.6 billion in economic value generated in 2022 alone. Although the industry has experienced significant volume-based growth in the past, the report emphasizes that future progress will be driven by enhanced efficiencies, reaffirming the industry’s dedication to sustainability and environmental stewardship.

Conor Ryan, Chair of Dairy Industry Ireland, warmly welcomed the report, highlighting the industry’s commitment to Ireland’s climate objectives while concurrently safeguarding the economic and social well-being of rural communities. “The report showcases the remarkable success story of the dairy industry and underscores the economic contributions of our dedicated farmer suppliers and the tens of thousands of individuals employed by the sector throughout the island,” he declared. “We are eager to collaborate with the government to establish the necessary frameworks to help Irish agriculture strike a balance between environmental goals and the economic vitality of the sector, which serves as the lifeblood of extensive regions outside the urban centres.”

The report emphasises that all facets of the Irish dairy industry, including farm family suppliers, are actively investing in technology and process enhancements to fulfill environmental responsibilities such as water quality and biodiversity preservation. The industry acknowledges the paramount importance of addressing climate challenges and stands ready to engage with stakeholders in a cooperative effort to achieve a harmonious approach.

Conor Mulvihill, Director of DII, said: “Despite facing recent adversities such as the Covid-19 pandemic, the Ukraine energy crisis, and Brexit, the Irish dairy sector has exhibited exceptional resilience. In 2022, it generated a remarkable €17.6 billion in economic output for the nation’s economy, with this output predominantly concentrated in rural areas and supporting nearly 54,000 full-time equivalent jobs.”

The report underscores the importance of the dairy industry to the indigenous economy and its competitive advantage, highlighting the sustained growth in output and jobs in recent years. The nation’s strategic geographic location and temperate climate provide an advantageous backdrop, fostering the growth of high-quality grass, which, in turn, sustains a thriving outdoor grazing dairy model.

Industry Overview

Agriculture is Ireland’s largest indigenous industry, with the dairy sector being its most significant contributor to the Irish economy.

The dairy sector is one of the largest indigenous contributors to the Irish economy, accounting for €17.6 billion of output in
2022. It is a vital industry to sustain a vibrant rural economy and associated employment.

There are 19 main milk processing sites and Ornua’s butter plant located across the country, all of which have had
significant capital investment in recent years. The processing industry is a low margin, capital-intensive industry which has
seen a significant capital investment programme, with about €1.1 billion invested in processing assets over the past five years. In addition, there are a number of global nutrition companies that own and operate infant formula plants in Ireland.

The industry processed 8.8bn litres of milk in 2022, produced by c.16,700 family farms. This was processed into a premium
range of branded consumer products and dairy ingredients. The industry is export focused, with customers in over 120
countries and last year Ireland was ranked the 9th largest dairy export nation in the world.

DII’s report, conducted by EY, “Economic Contribution of the Dairy Processing Industry to the Irish Economy & Processor Forecasts to 2030” is available to download here.

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