By Steve Moncrieff, Managing Director, Dairy Connect

Nobody in Irish dairy wants to talk about the farms that will not survive the next decade. The conversation is easier when it stays abstract - sector-wide targets, aggregate reductions, industry adaptation. But behind the policy documents and strategic frameworks are real operations, real families, real communities facing existential questions.

This is not pessimism. It is honesty. And honesty is the prerequisite for any serious discussion about sustainability in Irish dairy.

The Numbers That Matter

Ireland's climate commitments require agriculture to reduce emissions by 25 percent by 2030 - the lowest sectoral reduction target, but still substantial. Within that, dairy carries a disproportionate share of both the burden and the scrutiny. The national herd contributes roughly a third of agricultural emissions. Methane from enteric fermentation and nitrous oxide from fertiliser application are the primary culprits.

The nitrates derogation compounds the pressure. This EU exemption allows Ireland to stock at higher rates than standard limits would permit - 250 kg of nitrogen per hectare rather than 170 kg. It has been essential to the expansion of dairy farming since quota abolition. Without it, many intensive operations would be forced to reduce herd sizes significantly or acquire additional land.

The derogation is not guaranteed. It requires ongoing approval, contingent on demonstrated progress in water quality. Recent data has been unfavourable. Nitrate concentrations in groundwater have risen in key dairy regions. Phosphorus levels in rivers show limited improvement. The political and regulatory pressure to tighten or withdraw the derogation is genuine.

"The licence to operate will become the licence to export."

The Human Cost

We have spoken with farmers who invested heavily in expansion between 2015 and 2020, following clear signals from processors and policymakers that growth was the path forward. They built new parlours. They increased herd sizes. They took on debt. Now they face a future where that expansion may be curtailed or reversed.

The anxiety is real. Some describe feeling betrayed - first encouraged to grow, now told to contract. Others express frustration at what they see as inconsistent policy signals. Many worry about their ability to service debt if stocking rates are reduced.

These concerns deserve acknowledgment, not dismissal. The transition will not be painless. Some operations - particularly those that expanded aggressively on marginal land with high debt loads - may not survive in their current form. Exit schemes, diversification support and managed transitions will be necessary. Pretending otherwise does the sector no favours.

The Other Side of the Ledger

Having acknowledged the difficulty, let me make the case for why sustainability could become Irish dairy's greatest competitive advantage.

The demand signal from major retailers and foodservice operators is unambiguous. Tesco, Sainsbury's, Carrefour, Walmart - all have committed to Scope 3 emissions reductions across their supply chains. They need suppliers who can demonstrate, with verifiable data, that their products meet tightening carbon thresholds. This is not corporate posturing. Procurement decisions are already being influenced by sustainability credentials.

Ireland has structural advantages that most competitors lack. Grass-based systems are inherently lower in embedded emissions than intensive indoor operations reliant on imported feed. The maritime climate produces consistent grass growth with minimal irrigation. Origin Green, whatever its limitations, provides a verification framework that can be built upon.

The opportunity is to transform Ireland from a supplier of competitively priced dairy into a supplier of verified low-carbon dairy - a premium category that commands higher prices and more secure commercial relationships.

What Must Change

Capturing this opportunity requires more than incremental improvement. Several shifts are necessary.

From compliance to commercialisation. Current sustainability reporting is largely designed to satisfy regulators. The next phase must produce data that satisfies commercial buyers - granular, verifiable, buyer-specific information that can be embedded in supply agreements and used to justify premium pricing. This requires investment in monitoring technology, data infrastructure and third-party verification.

From farm-level to supply-chain thinking. Retailers care about the carbon footprint of the final product, not just raw milk production. Processors must work with farmers to optimise the entire chain - from feed sourcing through processing to distribution. This requires closer integration and data sharing between farmers and processors than currently exists.

From generic claims to specific proof. Grass-fed is a good story. But it is not, by itself, sufficient. Buyers want to know: how much grass? What feeding regime in winter? What is the precise carbon intensity per litre? What proportion comes from methane versus nitrous oxide? The more specific the data, the more valuable the commercial proposition.

Managing the Transition

None of this happens overnight, and not every farm will make the journey. The industry needs to think carefully about how to manage the transition.

For operations that cannot viably adapt - whether due to location, scale, debt burden or other factors - exit pathways must be dignified and adequately resourced. Early retirement schemes, land consolidation programmes and diversification support should be part of the toolkit. Allowing marginal operations to fail slowly and painfully helps no one.

For operations that can adapt, the sector needs coordinated support for technology adoption, knowledge transfer and capital investment. The most effective interventions will be those that help farmers understand the commercial return on sustainability investment - not just the regulatory compliance benefit.

For processors, the imperative is to develop tiered sourcing arrangements that reward sustainability performance. If farmers who invest in emissions reduction see a price premium for their milk, adoption will accelerate. If they see no return, progress will stall.

The Honest Conclusion

Irish dairy faces a genuine reckoning. The constraints are real. The transition will be difficult. Some will not survive it.

But the opportunity on the other side is equally real. A smaller, more efficient, more sustainable Irish dairy sector could command higher prices, secure more stable buyer relationships and maintain social licence in a way that a sector perpetually fighting regulatory constraints cannot.

The question is not whether to adapt - that is no longer a choice. The question is whether Ireland adapts strategically, capturing commercial value from sustainability performance, or merely reactively, contracting under pressure without capturing the premium that environmental leadership could command.

The licence to operate will become the licence to export. That is not a threat. Understood correctly, it is an opportunity.