Lisavaird Co-op equipped to process expected 40% rise in dairy output

Lisavaird Co-op is equipped to process its anticipated dairy output increase of 40%, or about 12,000 tonnes of cheese, annually from 2015 onwards, says its chief executive Pat Moriarty.

Farming shareholders in the co-op — which is part of the Carbery group in West Cork along with Drinagh, Bandon and Barryroe — were paid around €750,000 in bonuses during a record 2011.

Lisavaird’s latest published accounts show that the co-op’s sales were up 12% to €58.5m for 2011. In all, its near €860,000 profit from milk was up 38% on the previous year.

When you add the €1.79m from associated businesses and its share of joint ventures within Carbery, total profits come to €2.76m. Shareholder funds increased by 3% to €53.6m. Little wonder the mood was positive at the co-op’s latest strategy meeting with membership.

“The feedback from the members has been positive,” said Mr Moriarty. “Our philosophy is that all of our profits go back to our suppliers, and 2011 was one of our higher pay-outs in recent years.

“We did drop the milk price by 3c in May, which was about a month later than everybody else, but we didn’t drop it in June as we recognised the weather difficulties our members were facing. In terms of the price for the rest of 2012, we will be taking it one month at a time. We are keeping an eye on the world markets, and they have at least stopped falling.”

Lisavaird’s membership survey suggests a 40% increase in dairy output for the co-op following the end of EU quota restrictions in 2015. Even at that boosted output, parent company Carbery will still be operating with plenty of processing headroom.

Lisavaird chairman Donal Tobin said that the response at the co-op’s recent AGM was very positive, due to the very competitive milk price delivered, but also due to the €5 per tonne bonus for feed and fertiliser which supports the beet and pig farmer.

The group and its partners in the USA, Germany and elsewhere also have considerable experience in developing innovative consumer products.

Lisavaird’s members are confident that their group has the right mix of industry-focused food and beverages ingredients, as well as market-aware retail products to match the anticipated increased dairy output.

“The finance for expansion will come out of our reserves,” said Mr Moriarty. “Carbery requires very little in the way of extra equipment, so you’re mostly looking at on-farm equipment and some extra livestock. We have always worked closely with our wholesale customers to develop new products to meet their needs.”

Mr Moriarty said there is a lot of confidence in the region about expansion. The co-op’s 279 milk suppliers are also hopeful that they will be able to access credit when it is required to finance growth in the sector to pay for new equipment such as bulk tanks and meal bins.

Lisavaird’s 2011 results showed a 16% increase in turnover in the dairy division, up to €28.6m for the year. Revenues in the agri and trading divisions were up 5% to more than €22m.

Turnover in the cooked meats division fell 16% to €4.3m, while piggeries turnover was up 17% on the back of increased sales of pigs.

The partly Lisavaird-owned Clona Dairies experienced losses during 2011, while the co-op was happy with continuing progress at its wind farm in Tyrone, a joint venture with Bord Gáis.

The €5m debts on the co-op’s books relate to recently acquired properties in Germany.