Kiersey: Dairy farmers must raise co-op share if sector is to expand

ACTIVE dairy farmers need to increase their share of co-op ownership from its current 30% level, plus invest in new on-farm facilities if the sector is to achieve its ambitious expansion plans, said IFA national dairy committee chairman Kevin Kiersey.

Mr Kiersey told attendees at yesterday’s IFA-hosted Dairy 2020 conference in Dublin that there will be a need to invest in extra stainless steel and also, very importantly, in new product development and marketing to process and sell additional milk. Once existing resources, existing plants, have been optimised, catering for additional profitable expansion will require new resources and additional capacity.

“Farmers have always been to the fore in the industry’s expansion plans,” said Kevin Kiersey. “Those who were around for the expansion in the 1970s will know that we have the capacity to get to those production levels again. There will be a need for farmers to invest in on-farm facilities. If there were transparency on price I don’t think farmers would be adverse to the processors retaining some of the profit to help fund expansion. There would have to be very clear transparency for that.

“I believe the need to spend on product development and marketing will be required independently from expansion, because we need to reduce our dependence on commodities.

“So, money will have to be spent with or without expansion. A financing plan must be developed centrally to make best use of scarce resources. This plan must be co-ordinated within the industry and must avoid duplication by identifying the plants where the investment must be concentrated.”

Mr Kiersey said a 1.5c/l increase in the January milk price is immediately achievable, and should be passed back by co-op board members at their next meeting.