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Lakeland boss says dairy market will improve next year


Positive: Michael Hanley

Positive: Michael Hanley

Positive: Michael Hanley

Conditions in the dairy market are set to improve next year, a major cross-border processor has claimed.

Lakeland Dairies in Co Cavan formed a joint venture with the dairy business of Armagh-based Fane Valley during 2015 - a year when farmers were rocked by falling prices and the end of EU quotas.

Latest figures from the Department of Agriculture and Rural Development show an average milk price of 20.4 p per litre in October - up from August's low of 18.8p, but down from a high in November 2013 of 34.7p.

But Lakeland chief executive Michael Hanley said global stocks should begin to clear in 2016, leading to a gradual improvement in market conditions.

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

And it formed a further joint venture with the agri-business division of Fane Valley.

Mr Hanley said farmers were facing "an increasingly globalised and often volatile dairy marketplace".

Several difficulties had materialised at once, he claimed.

"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 added, claiming that |importers and traders had increased their stock to take advantage of lower prices.

That stock would take "some time" to be used up, but Mr Hanley said: "Overall, we anticipate that there will be a gradual improvement in market conditions once global stocks begin to clear."

And he said the business was making "strong progress overall": "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."

And he said the joint ventures with Fane Valley were "an excellent development between two friendly and neighbouring co-operative societies".

The Lakeland joint venture was the second big dairy tie-in of the year after Ballyrashane Co-op, in Co Antrim, and Town of Monaghan Co-op merged.