Move towards milk quota abolition will boost confidence, says Hanley

Dairy farmers can look to 2013 with confidence despite the recession and the likelihood of further price volatility, according to Lakeland Dairies CEO Michael Hanley.

The leader of the Co Cavan-headquartered co-op said Irish milk suppliers could benefit from growing demand for dairy products in emerging global markets.

He also offered suppliers encouraging news on global milk output having modified of late, and the recent global oversupply having been largely cleared.

However, Mr Hanley also warned: “Overall, while dairy markets have improved, there is always the possibility of price volatility. This will remain a key challenge in future years to come. There are serious problems across Europe with the economic recession, currency instability, and major national debt issues for individual countries. Unfortunately this has not yet been contained. The recession is affecting nearly every Western economy and buying power among consumers is heading for an all time low.”

Nonetheless, he said the move towards the abolition of EU milk quotas will lift confidence in the dairy sector. He said global dairy markets had improved, having declined considerably earlier in the current year. This had been mainly due to a world surplus of milk. However, the lower prices that this caused have now led to a clearing of stocks. This has started alleviating the oversupply situation.

“Strong growth in dairy consumption in markets outside of Europe is expected to continue. Consumers in developing and emerging economies are increasingly demanding dairy products. In particular, there is continuing growth in emerging markets across Asia, Russia, India, and Africa.

“Across the EU, milk output has moderated in recent months. This follows from the effects of lower prices, poor weather and higher feed and grain costs. In the US, milk supplies for dairy processing are constrained. In New Zealand, the strength of their currency is making exports more costly. There is room for Ireland to contribute to any uplift in dairy market demand.”

During 2012, ice cream made by Lakeland Dairies for SuperValu won a highly prestigious award for excellence, taking a gold medal at the 2012 Great Taste Awards in London.

The co-op also took top honours at the inaugural Cavan Business and Tourism awards. Lakeland won the award for most innovative business (food sector) and was named overall winner of the Business and Tourism Awards.

Mr Hanley said: “Lakeland will continue to be lean, competitive, and innovative in bringing our valued added products to market. We have the skills, technology and plants that we need to achieve this.

“We have a clearly defined plan in place and we have made necessary investment decisions to meet the future processing needs of all our producers. We also have the markets and the customers for Lakeland products made using that future milk. Assuming a suitable milk production profile, Lakeland will process all the extra milk sent to us by our farmers in the years ahead.”

Lakeland Dairies is the second largest dairy processing co-op in Ireland. It is farmer-owned and is an internationally recognised supplier of dairy ingredients and food service products with a mix of high quality raw materials, modern processing facilities and a highly skilled workforce. The co-op markets a wide range of value added dairy products and food ingredients worldwide.