The Dairy Board has said that 2006 was a year of strong growth for the industry.
Turnover at the board increased by 5% to more than €2 billion. It says farmers can expect an increase in milk prices this year as returns from international markets become stronger.
The Dairy Board exports products on behalf of many Irish companies and co-ops around the world using the Kerrygold label.
It says that despite a weak start to last year, turnover ended higher and there was an operating surplus of €43m.
Exports of butter and milk powder were particularly good, especially in Germany, Britain and the US.
Dairy Board chairman Michael Cronin said markets were difficult until last September, when prices started to improve, and he expected them to move up further during this year. Chief executive Noel Coakley also said 2007 had started well for the industry, and a lot of the gloom of recent years seemed to have lifted.
