I also believe we have a duty to help shape and prepare our farmer-owned industry in this crucial transitional phase.
Within the farm-gate, we will need prudent planning for profitable expansion and managing volatility.
There are real, exciting opportunities to develop our industry to service growing global demand from affluent populations in emerging countries. The level of enthusiasm among dairy farmers and new entrants, is encouraging.
However, this must be tempered by realism and prudent planning. Farmers must be able to grow their enterprise incrementally, with business plans soundly based on conservative prices, costings, and margins which factor in some volatility. In short, expansion must be profitable, and farmers must be able to access quality business and financial planning advice and skills building.
Co-ops will have to demonstrate to their suppliers the marketing and financial benefits of the new Dairy Quality Assurance and Sustainability scheme. Bord Bia audits will also have to be consistent and fair.
While, thanks to detailed negotiations by IFA, I do not expect the vast majority of dairy farmers to have difficulty qualifying under the scheme, farmers must be rewarded for submitting themselves to the audits. The acid test of the QAS scheme will be its ability to help us tap into higher value markets more resistant to price variations.
Lastly, I see it as IFA’s role to help devise mechanisms at national and industry level to help mitigate the impact of extreme margin volatility on dairy farmers’ incomes and their ability to invest.
Beyond the farm-gate, we will be focused on efficient, world-class processing and marketing for optimum returns.
My view is that we must influence continued consolidation and collaboration on collecting, processing, and marketing milk in the context of our ambition to grow production.
Some of our leading processors have already committed or planned for major processing expansion, in most cases with significant recourse to financial contributions from farmers.
I for one expect to see Dairygold and Glanbia co-ordinate their processing investment so that one is optimally filled, using milk from both sets of suppliers, before the next is built. We must ensure board decisions are made with no other priority in mind.
Finally, we need the Irish Dairy Board, in close conjunction with processing co-ops, to market our quality assured, sustainable milk to the world, and secure its higher value to return it to farmers.
I think the IDB could also take on another mission: That of devising and administering risk management pricing mechanisms operated through co-ops offering farmers options to reduce the impact on their income of volatile margins.
* Newly elected IFA national dairy committee chairman-elect Sean O’Leary farms at Mourneabbey, near Mallow, Co Cork, with his wife Fidelma and their three children Daniel, Orla, and Valerie.
From 2001 to 2004, he served as IFA North Cork county chairman, and from 2005 to 2009, he was Munster vice-president of IFA and chairman of its project team on climate change. In the latter position, he was the voice of IFA in Brussels on climate change issues.