29 Oct 2010
IFA SOUTH EAST DAIRY MEETING WITH CO-OP BOARD MEMBERS EMPHASISES IMPORTANCE OF INDUSTRY CONSOLIDATION TO PLAN FOR EXPANSIONDairy
Speaking last night at the IFA South East dairy meeting in New Ross, attended by Board Members of Glanbia, Wexford, Callan and Mullinahone Co-ops as well as regional IFA officers and representatives of the Dairy Discussion Groups, IFA National Dairy Committee Chairman Kevin Kiersey said the focus on industry consolidation was now more important than ever, if the industry is to stand a chance of delivering on the ambitious 50% expansion target set out in the Food Harvest 2020 report.
The New Ross meeting is the fourth and last in a series of regional co-op board members’ meetings run by IFA since early Summer, with the aim to keep the pressure on co-op board members to deliver industry consolidation in the best interest of dairy farmers.
“There is genuine enthusiasm and real potential on dairy farms to increase milk production after 2015. However, <b>profitable </b>expansion is what farmers want and need, and that must be market led, not just production driven. First, we need the Irish Dairy Board to work, with the industry, to identify the markets and the products into which the additional milk can profitably be marketed,” Kevin Kiersey said.
“To achieve viable levels of expansion , co-ops must first make best use of every bit of spare capacity they have, by utilising optimally every plant at peak when some of the bigger ones are stretched, and by making clever milk swaps off peak to ensure the most efficient plants are used at all times. Doing this requires a great deal more co-operation and consolidation in the industry,” Mr Kiersey said.
“When all spare capacity is fully, optimally utilised, and only then, should any further investment be made. Co-ops will have to come forward with a detailed plan outlining the additional capacity required to meet the expected extra production for their region, fully costed out, and setting out how it is to be financed,” he said.
“ Farmers will need greater assistance from advisory services to address calving and production patterns, to help make even better use of existing capacity. They cannot be asked to contribute anything toward additional processing investment until such time as optimum utilisation of existing processing capacity has been fully secured, nor can they be asked to carry alone the full cost of expansion,” he said.
“The profitable expansion ambitions we all share for the sector can only be delivered through a single-minded, co-ordinated approach by all operators from industry, advisory services, the Irish Dairy Board, Government, banks, farm organisations, and, let’s not forget, dairy farmers themselves,” he said.
“However, board members of co-ops are the ultimate decision makers in this process, and they must move rapidly from discussions and debates to decisions and action, in the best interest of their fellow-dairy farmers,” he concluded.