Harmony for milk supply chain

Jacqueline Fitzgerald, co-founder of Concept Dairy, at the National Ploughing Championships at Ratheniska, Co Laois. Picture: Dan Linehan

The “most fractious relationship between the farmers and the co-ops is price”, and if that effect of price “can be minimised”, farmers can have a “much cleaner, healthier relationship with your co-op”.

This is according to Diarmaid Mac Colgáin, founder of Concept Dairy and a former head of trading with Ornua, who is on a mission to bring transparency and harmony to the milk supply chain, from farmer to buyer.

He founded Concept Dairy with his partner, Jacqueline Fitzgerald, having seen the “need to create some transparency across the dairy supply chain, to help farmers take more control of their price”.

Concept Dairy won the AgTechUCD Innovation Centre Start Up Award at the 2022 Enterprise Ireland Innovation Arena Awards at the National Ploughing Championships.

Volatility

As Ms Fitzgerald told the Irish Examiner, at the moment, “farmers are milking today, but they won’t find out how much they’re going to get for their milk until the middle of next month”.

“There’s been a lot of volatility in the market so, at times, the price can be up and other times the price will drop; and if you’re a farmer, it’s very hard to run a business and plan into the future,” Ms Fitzgerald said.

“Meanwhile, the cost of production, all those input costs, they’re all really high so what we wanted to do was create transparency across the supply chain that would enable farmers to take more control of their milk price but also to really importantly work with the co-ops, the processors, to help them manage their risk into the future too.

“Because the processor, if they can be more stable, then they can give the farmers a more stable price. It’s a win-win.”

The pair have developed an app for farmers “which gives them a view of the live market price”.

“Normally, in dairy, a lot of the pricing information is historical, but we’re giving them access to see what their milk is worth today and into the future, and they’ll be able to lock in their milk price when they choose for up to two years in the future,” Ms Fitzgerald explained.

'Badly stung by fixed milk prices'

Ms Fitzgerald said she and Mr Mac Colgáin have “spoken to a lot of farmers who have been really badly stung by fixed milk prices” over the last number of months, due to sharp rises in market prices compared to those in some fixed milk price schemes.

Concept Dairy’s farmer app gives dairy farmers a view on live prices that they can lock in a chosen amount at a chosen time, and with price protection built in and a minimum price function, so that farmers won’t “lose out if the milk price goes up”.

Along with this, they have a risk management platform that goes to the milk processor, to help them understand and manage their risk too.

Concept Dairy has recently been awarded a grant that will allow them to build the next phase of functionality into the app, “the ability for farmers to lock in their fuel, feed and fertiliser costs”.

“If they’re locking in their costs, and they’re locking in their milk price, then they’ve got a margin and they know exactly how much they’ve got to play with,” Ms Fitzgerald added.

“We really wanted to help to give farmers economic sustainability because if they’ve got that economic, financial security, then they’ve got the capacity to be able to invest in things like environmental sustainability, and buy into new technologies.”