Dairy Sector Will Improve In 2016, Says Lakeland Dairies Boss

The head of milk processing co-operative Lakeland Dairies has said he expects a “gradual improvement” in market conditions in 2016.

Lakeland chief executive Michael Hanley was speaking at the end of a year which has seen farm gate prices fall to below the cost of production for many farmers.

It was a dubbed a “milk crisis” by farmers and prompted mass demonstrations cross Ireland and Britain with some taking to clearing supermarket shelves of milk to make their point.

Others blocked milk deliveries being made to leading retailers.

Mr Hanley said it had been challenging year “due to several factors coming into play at the same time”.

“This has included the abolition of the EU quota system and increased production by European farmers, the Russian ban on EU dairy products and a global oversupply from dairy producing countries,” he said.

“The major dairy importers and traders across every continent have taken advantage of lower prices to increase their stock of dairy products over the past year and this will take some time to wash through the system.”

But he was optimistic on the prospects for next year.

“Overall we anticipate that there will be a gradual improvement in market conditions once global stocks begin to clear,” he said.

And on the health of Lakeland Dairies.

“In spite of the current market volatility, we are making strong progress overall,” added Mr Hanley.

“We have 170 different products and these go to 77 countries worldwide. Our foodservice division makes over 100,000 tonnes of dairy products and 700 million individual product units each year.

“In the food ingredients sector, we supply hundreds of major food industry customers with ingredients and the world’s top infant nutrition companies with the highest quality milk powders.

“Recently, we also announced two strategic joint ventures with Fane Valley Co-operative across our respective dairy processing and agribusiness operations. This is an excellent development between two friendly and neighbouring co-operative societies.

“Lakeland Dairies will be the second largest dairy processing co-operative on the island of Ireland in 2016, with a milk pool of over 1.1 billion litres. That will further enhance efficiencies across our entire processing footprint. Indicatively, that level of milk throughput will yield 160,000 tonnes of powders a year and over 30,000 tonnes of butter, in addition to our dairy foodservice output.

“All of these developments have been achieved from existing resources off the back of a strongly performing and well managed business. There have been no share-ups, levies or funding demands placed on our milk producers.”

Mr Hanley said the co-operative was “intent on delivering value to our milk producers with as high a milk price that we can possibly pay, in line with market conditions”.

Lakeland Dairies covers the northern half of Ireland and is headquartered in Co Cavan.

Source: irishnews.com