This paper reviews the economic performance of Irish dairy farms over the period
1998 to 2006. Econometric techniques are employed to examine the variation in cost
structures and to identify the factors affecting farm profitability. The overall objective
of the paper is to establish the long term sustainability of dairy farming in Ireland and
to explore the ability of farmers to cope with the potential price volatility that may
arise out of a WTO agreement or reforms to the EU milk quota regime. National Farm
Survey data from Ireland are used to analyse production costs. Average cost curves
are shown for the Irish dairy industry and are compared to the results of similar
analysis conducted for England and Wales
