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Dairy market will continue to pick up next year, claims Lakeland boss

By Margaret canning

The head of dairy processor Lakeland Dairies (NI) has said a recent uplift in market conditions will continue next year. In his December message to farmer members in Northern Ireland, Cavan-based Lakeland group chief executive Michael G Hanley said long-term volatility in dairy markets had made it a "very difficult year".

The company took over the dairy operation of Northern Ireland co-op Fane Valley last year. In August, Lakeland announced a move to seasonal production at Fane Valley's plant in Banbridge, which could affect the future of 72 staff at the Co Down plant.

Mr Hanley said he "strongly hoped" that moderate improvements in the market, led by demand for dairy commodities such as milk powders, would continue in 2017.

Milk prices for Northern Ireland farmers have fallen dramatically in the past few years, but recent months have brought a slight recovery.

The Department of Agriculture, Environment and Rural Affairs recorded an October net producer price per litre of 24.35p, which was up from a low earlier this year of 17.7p.

But that was still substantially below a recent high of 34p recorded in 2013.

Mr Hanley told members that Brexit was a factor. "Some market uncertainty has been created by the Brexit decision," he wrote.

"However, we will meet any outcomes from that process as competitively as we always have done."

But he said there were many factors influencing the markets including "the dairy buying power of oil-producing nations, the continuing Russian trade embargo, fluctuating demand levels in Asia, currency exchange rates and the overall global milk supply and demand balance".

And Mr Hanley said the co-operative would deal with Brexit as it had any other challenge.

He added: "We have long-term customers with strong ongoing demand for our products in the UK, and this will continue to be the case.

"Our overall strategy is to achieve the highest levels of efficiency and the lowest processing costs to ensure that the maximum possible returns are made to our milk producers at all times.

"This must be consistent with market conditions as part of a long-term and sustainable co-operative business."

His message to farmers concluded: "Our mission remains constantly to support our dairy farmers, and we are fully energised behind that goal now and into the future."

Last year Lakeland also opened a new global logistics centre in Newtownards, Co Down, where it already operates the Pritchitts dairy food service site.

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