The realities the entire dairy sector must face
It was quite extraordinary however that those on the phone whining about the coverage of the story by us were the farmers.
In particular, they had a gripe with the suggestion that Dairygold was paying more to farmers.
The implication was that farmers were getting higher prices than before for their milk and the second slur of what we wrote was that farmers are to blame for the job losses.
That was never even meant to be implied, let alone said openly.
The new young Turk at the helm in Dairygold, Jerry Henchy, has already spelt it out that the cost structure of the organisation was not sustainable.
Need farmers be reminded that last year the co-op sold over 6m shares in IAWS to shore up its performance.
Without that fire sale, Dairygold would have made several million losses.
It had to be borrowed because the price paid for milk, though lower than that paid in the previous year, could not be recovered in the markets due to huge pressure from New Zealand and other low cost producers. Those are some of the realities facing not just Dairygold but the entire dairy sector.
Farmers were given some of the blunt facts at the annual general meeting. Cheese sold in Britain last year fetched less than Dairygold paid farmers for it at the farm gate.
That’s the kind of reality that has caught up on the Irish dairy sector, not just Dairygold.
The bottom line is that cost cutting is essential.
That means fewer jobs and significantly fewer jobs for workers in Mitchelstown and Mallow, in particular, and in the entire catchment area where the country’s biggest dairy co-op has its base.
Dairygold wasn’t alone last year is selling off IAWs sharers. It looks as if a substantial portion of the sector was forced down the same road as the big co-ops moved to ensure some return to farmers.
That means fewer jobs and significantly fewer jobs for workers in Mitchelstown and Mallow, in particular, and in the entire catchment area where the country’s biggest dairy co-op has its base.
Dairygold wasn’t alone last year is selling off IAWs sharers. It looks as if a substantial portion of the sector was forced down the same road as the big co-ops moved to ensure some return to farmers.
It is projected that the number of dairy farmers will drop from the present level of 23,000 to half of that in another few years, because making a living from the land is no longer possible under the current arrangement.
If one looks back over the years, agriculture has been culled through a process of attrition that is continuing to impose massive change on Irish and European farming.
More than half the farmers of the country will be turned into gardeners.
The other part of that process is the threat to jobs at Dairygold.
Ever since Denis Lucey retired, speculation mounted that the person coming in to replace him would have a huge job of work to do to restore competitiveness.
For the group’s 3,300 workforce, where the axe will fall is still the unanswered question.
A few things have been established in the meantime. Transport is being privatised. CMP Dairies in Cork is not to be closed under the plans.
The fate of the four dairy plants are under a serious cloud with at least two, if not three, to get the chop.
Beef processing is for sale if the group can finds a buyer. It lost up to 18m in recent years, hardly a recommendation to any potential buyer but then beef processors are a breed apart and seem oblivious to the pressures they also face in the change sweeping global food markets.
Pig farming is going to go and the total job losses either through redundancies or jobs that are sold on with bits of the business will be at least 1,500.
Judging from the reaction to last week’s announcement, workers need not expect too much sympathy form the farmer shareholders as management slices through the inefficiencies with cold precision.
Sympathy for those less fortunate is not high on the agenda of farmer suppliers to Dairygold.
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