5th January 2002
News
5th January 2002
News |
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Payment to join United Dairy Farmers
By James Campbell
The New Year sees a new policy from United Dairy Farmers towards new entrants to milk production in Northern Ireland. Any such producer wishing to join United will be required to pay 0.25p per litre for five years to buy shares in the producer co-operative.
According to the co-operative society this will "in general terms" put the new member shareholding on a par with that of existing members. The intention is that money paid by new entrants to purchase shares will be used for on-going investment in the infrastructure of the business.
The Board of United points out that new entrants joining United benefit from the investment which existing members have put in since the formation of the Society. Among the assets listed are the milk collection lorries, the laboratory, offices and computers, the three milk processing plants of the wholly owned subsidiary company Dromona Quality Foods and the marketing expertise of the associated company Halib Foods. In addition there is the business of Dale Farm Dairies recently acquired for £18.25 million.
United's 3000 members currently have an average of 4,300 shares each in these assets.
They and new members are entitled to any dividend which may be declared on shares and to any issue of bonus shares related to their annual milk supply. The shares valued at £1 each are redeemed if the member ceases milk supply to United.
The Board of United has decided that "new entrants should make a more realistic contribution to the assets of the Society when they join" because further investment will be necessary with milk supplies rising.
United chief executive David Dobbin sees a need for expansion of capacity for processing milk in order to deal with the ever-increasing level of peak production in NI. He points out that there has been very little investment in extra capacity in recent years, while NI milk quota has expanded from under 1300 million litres to over 1600 million litres and we have seen the closure of Fermanagh Creameries cheese manufacturing facility at Lisnaskea and other smaller milk processing factories.
David Dobbin is "pleased" with the first month's trading at Dale Farm under its new ownership. "Consumer products offer a more stable return" he says, while admitting that milk powder business has been very difficult and resulted in big losses for Dromona Quality Foods in recent months. David Dobbin feels that the recent increases in EU export refunds on milk powders will tighten the whole dairy product market but says that more is needed to lift prices.
United Dairy Farmers will be campaigning for another increase in refunds as soon as possible. Prices paid for November milk clearly indicate that something is needed to boost returns.
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Copyright © : The Irish Farmers Journal 2002 |
