The price of milk paid to farmers last year fell by 9%, according to the annual report of the Irish Dairy Board. The Board said there was also a 7% fall in returns for butter and skimmed milk powder.
The report shows that international prices were weak for most of the year and the Dairy Board described global markets in 2002 as generally disappointing.
However, the Board has indicated that it is hopeful that world market conditions will be more favourable this year.
However, despite the global economic downturn, the Dairy Board's turnover was up by 1.4% to €1.89bn, and pre-tax profits, at €32m, were about the same as the previous year.
The strong performance by the Board's overseas subsidiaries offset the weak market returns. The Dairy Board sells product on behalf of the Irish industry in over 100 countries around the world.
Managing Director of the Irish Diary Board, Dr Noel Cawley, said improved world demand should improve matters this year, although the weakening of the dollar and sterling could impact on final returns.
He also said he also expected that a recent contract with a leading US distributor would contribute about $130m (€111m) annually for the next few years to the Board's finances.
In regard to next month's CAP reform negotiations, Dr Cawley said that while there would be changes, the basic EU policy would be left in place for another decade.
