13th April 2002
News
13th April 2002
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 LIVESTOCK - Dairy News | Husbandry | Features | Milk League Half of the milk NOT going through the Dairy Board
By Des Maguire
Only half of the manufacturing milk produced in the country (500 million gallons plus) is currently being marketed through the Irish Dairy Board. The remainder is being marketed by processors operating independently.
This was confirmed by IDB boss Dr. Noel Cawley at last week's IFA national dairy conference in Cahir.
Responding to questions from farmers, Dr. Cawley said that depending on the year, the board accounted for 50 per cent to 60 per cent of Irish manufacturing milk output in recent years.
He confirmed that some manufacturers only traded insignificant volumes through the board, others do not offer all their output to the board while the board was offered no cream liqueurs or chocolate crumb at all.
Asked whether the Kerry Group would continue to offer product from Golden Vale milk to the board following the recent take-over of the Charleville-based business, Dr. Cawley said that IDB and the Kerry Group were in discussions on this issue and on the Golden Vale board representation on the IDB but that the issue had not yet been resolved.
"We hope that an agreement will be reached in the near future but one of our basic rules is that if you want to be a member of the IDB you have to pay the levy," he said.
(Kerry does not pay the board's administration levy of 0.5p per gallon nor does it offer significant volumes of product for marketing through the board)
IFA president John Dillon called for more support from co-ops for the Dairy Board warning that rivalries between different sellers of Irish dairy products on export markets was counterproductive for manufacturers and for farmers.
"Co-ops cannot be allowed to undermine the value of Irish produce by undercutting each other systematically in the market place, at home or abroad," he said.
"They must all become better supporters of the Irish dairy industry in general and of the Irish Dairy Board, as a central, cohesive marketing entity in particular," he said. "Where there is division there are the seeds of weakness."
The IFA president was supported by a number of other speaker who called on co-ops to give more support to the Irish Dairy Board.
Dr. Cawley conceded that undercutting is a problem and that if the volumes handled by others become too high the Dairy Board would be under pressure in the long term. "That would not be good for Irish dairy farmers," he said.
But he said that the worse position was that the Board would be handling all of the product.
"That way we would be pleasing nobody whereas if some product is sold outside the board we have competition," he said
No change until July/August
Speaking on the outlook for dairy product markets this year, Dr. Cawley said that the first six months of the year would be difficult but he was hopeful that there would be an improvement in the second half - starting in July or August.
Butter and skim milk prices would be at or below intervention equivalent for the first half of 2002 and we were into a weaker cheese market with rising stocks and slower demand growth.
Higher current stocks and production in 2001 had weakened cheese prices in 2002 and growing imports were also adding to price pressure
There was little sign of recovery in butter exports but demand for milk proteins could improve in the second part of the year boosted by intervention sales. Because of the weak demand globally for butterfat more milk was going into cheese at the lower prices.
Dr. Cawley also said that both New Zealand and Australia had significantly increased milk production and were becoming aggressive on Third Country markets like Egypt which were historically difficult.
Russia traditionally a major importer of butter was short of cash and was switching from butter to margarine. They were only buying small quantities of butter to blend with margarine and non-bovine fats.
He said that the forecasts indicated that there would be an availability of 1.87 million tonnes of butterfat in the EU fifteen this year and a total utilisation of 1.83 million tonnes. This meant that there would be a surplus of 40,000 tonnes of fat in the Community this year.
He said that in all his time with the Irish Dairy Board he had never seen the market as bad as it was in November, December and January. "It was an absolute mess and you could hardly get a customer," he said.
Overall he said that all Kerrygold branded product was sold at a profit. He also confirmed that the Dairy Board intended to pay an 11 million euro bonus to member co-ops on top of the normal trading purchasing arrangements this year.
Dr. Cawley also confirmed that the Dairy Board has increased sales of product in consumer brands from 26 per cent of total sales in 1990 to 41 per cent last year and sales of food ingredients were up from 20 per cent to 32 per cent of total sales within the same period.
On the other hand, commodity sales represented only 27 per cent of total sales last year, down from 54 per cent in 1990.
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Copyright © : The Irish Farmers Journal 2002 |
