Dairygold says bank debt ‘at a very manageable level’

Dairygold has moved to reassure concerned suppliers that its bank debt is at a “very manageable level”.

The statement comes following a meeting of over 300 Dairygold suppliers that heard farmers raise concerns about the level of repayments the co-op is making.

Speaking at the Mitchelstown meeting, former TD and senator Ned O’Keeffe claimed the interest payments amounted to over €20m per year or €400,000 per week. The co-op paid €22m in interest payments in 2023.

A spokesperson for Dairygold told the Irish Farmers Journal on Tuesday: “Despite the concerns expressed by some [co-op] members at a meeting in the Firgrove Hotel on Monday 13 January, Dairygold’s net bank debt remains at a very manageable level, within our banking covenants, and our strong balance sheet provides the flexibility to continue to invest in higher margin activities.”

“The society’s capital investment projects over the past 10 years provide a world-class dairy processing infrastructure that has not only facilitated our milk suppliers’ expansion ambitions but also provides the foundation for higher value processing and more sustainable and lower emission operations, which will pay dividends into the future.”

Milk price

Milk price was another issue which aggrieved farmers at the Mitchesltown meeting and on this Dairygold said it has “continually been a consistently strong performer in the milk price league, but it is acknowledged that the returns from an element of our product portfolio, have been challenged in 2024.

“As normal, the overall financial performance for 2024 is currently being finalised and will be reviewed by the board, to determine the final position for 2024.”

It added that a cost and business optimisation review is ongoing “to ensure the business will be in a position to maximise the milk price to milk suppliers”.

Last December, Dairygold announced changes to its Loyalty Bonus Scheme which mean that any future milk price top-ups, year-end bonuses or feed rebates will only be paid in full to those suppliers who make purchases with the co-op that exceed 6c/l in 2025.

Suppliers who spend less than 6c/l with the co-op will only receive 50% of the top-ups.

Notice to quit

A number of suppliers have issued milk supplier agreement termination notices in response. When asked how many suppliers have given their notice to quit the co-op, Dairygold did not answer the question.

“While the majority of Dairygold members have reacted positively to the proposed changes, we are aware of concerns expressed over the change, which links any potential year-end bonus or to the level of purchases by a milk supplier,” its statement read.

“Dairygold has sought to meet all members who expressed concerns, to offer clarification on the changes and will continue to engage with members at board level, management and through our committees and governance structure.”