The CEO of Lakeland Dairies, Michael Hanley, has warned that the volume of skim milk powder (SMP) in intervention and the decreasing butter price will lead to a ‘sticky’ first six months for dairy farmers.

Speaking at the well-attended annual Offaly Macra na Feirme and AIB agri-seminar in Tullamore on 5 December, Hanley said: “The next six months are sticky because there has been a push back on the high butter prices that were there for just three or four months of 2017.

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“Butter prices were up at €7,000/t for four or five weeks in 2017, and SMP is under intervention, and there won’t be an intervention price paid for skim the spring of 2018”

Hanley called for the SMP that was held in intervention by the European Commission to be sold.

“So what we need is for the mountain of skim that’s being held in stores to be moved out into calf milk replacers, take a hit on it, move forward and let’s get to March or April with a much-reduced volume of product.”

Optimistic

However, Hanley was overall optimistic for the future of the dairy industry and told young farmers at the conference that Lakeland receives daily calls from new entrants or farmers wishing to convert from tillage to dairy.

The co-op is the third largest milk processor on the island and processes 1.2bn litres of milk a year.

Hanley stated that Brexit had not dampened supplier enthusiasm, with a survey of Lakeland suppliers showing that 46% of suppliers intend to increase milk output.

The CEO’s outlook was that the UK was just one of their export markets, and with global demand for dairy products increasing, there were still plenty of export markets for Irish milk and powder.

“I’m quite confident in relation to dairy markets because there is a growing world population, and there’s a growing consumption of dairy year on year.

“A lot of places have reached their peak in terms of milk availability and sustainability in relation to phosphate levels such as Netherlands so I think there’s fantastic opportunity for Irish dairy going forward.

“It’s a good time to be a dairy farmer, I think the next five to 10 years will be positive, albeit the next six months could be sticky enough because of the volume of products put into intervention.”

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