ICOS: Focus on price undermines dairy potential
The co-op representative group also believes further co-op rationalisation will be needed if its 150,000 members are to maximise their profits in the post-quota era.
“Co-op consolidation will ensure Irish dairy farmers have a strong presence in global markets and will support better milk price returns,” Mr Keane told the AGM in Portlaoise, Co Laois.
“Post-quota, dairy co-op boards must determine if their strategic approach should be on a go-it-alone basis or involve greater integration with some fellow processing and marketing co-operatives. ICOS has always argued for a consolidated dairy sector, with profitable farmer-controlled co-ops delivering sustainable incomes to members.”
A farmer from Co Laois, Mr Keane is also vice-chair of Glanbia Co-op, vice-chair of Glanbia plc and a director of Glanbia Ingredients Ireland Ltd. His role is to represent farmers’ interests in each of these boards.
Mr Keane said many co-ops have reduced their costs by collaborating on milk assembly and co-processing in recent years.
While ICOS has long promoted cost-sharing between co-ops, these efforts have often met local resistance.
The group has also met obstacles to its efforts to move the farmer’s focus away from price and onto a strategic view of the added value of the overall output.
“For some dairy farmers, expanding their businesses will involve consideration of their relationship with their co-op. While fully recognising and supporting supplier’s rights to change those relationships, ICOS would urge individual farmers to give very serious consideration to the integrity of the co-operative, and to the wellbeing of their fellow members.
“An exclusive focus on short-term milk price performance, without regard for a co-op’s longer term strategies, will see a loss of supplier ownership and control in the marketplace,” said Mr Keane.
ICOS employs 12,000 people in Ireland, plus 24,000 people overseas. It represents co-ops with a collective €14bn turnover.
