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Milk supplies soar as quotas end

By Darragh McCullough

Milk supplies at Irish processors are powering ahead 12 months after the end of quotas, despite loss-making milk prices and poor grass growth.

Volumes increased by 20-30% in March among firms such as Glanbia and Dairygold.

During the first 12 months without quota, milk intake increased by 22% at Glanbia.

There has been increased consolidation in the Irish market, with Lakeland Dairies and Fane Valley, based in Armagh, announcing joint ventures in dairy and agri-business last year. Ballyrashane Co-op in Co Antrim merged with Town of Monaghan to form Lacpatrick last year.

Kerry and the west Cork co-ops have notched up an 11-12% increase in supplies in the past 12 months, but it is further north that the real increase in milk production is materialising.

Arrabawn, based in Tipperary, has seen weekly increases of up to 40% this year compared to the same period 12 months previously, with the co-op's CEO Conor Ryan estimating that supplies are up 35% so far in 2016.

The surge follows a 20% increase in 2015 supplies at the processor.

Further north and west, both Aurivo, in Sligo, and Lakeland Dairies, based in Co Cavan, reported a 20-25% increase in milk supplies since the start of the year, compared to a 13% jump last year in the case of Lakelands. Arrabawn management are happy that the co-op is well positioned to cope with any increase in supply.

"We processed about 360 million litres last year, but we have 95% of the investment in place to bring our capacity up to 500 million," said Mr Ryan.

The co-op added approximately 40 suppliers through new entrants and transfers from other co-ops last year, to bring its total to 1,000 dairy farms.

Mr Ryan also believes that the market has bottomed out. "I think the announcement by the EU to double the intervention capacity has helped the market, but we are still facing an over-supply," he said.

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