Unless demand for milk picks up, the milk price will struggle to stay where it is, according to interim Dairygold CEO, Michael Harte.
Speaking to the Irish Farmers Journal at the announcement of company results for 2023, Harte said that while globally the growth in milk supply is low, demand is also low.
“Unless demand picks up, milk price is going to be struggling to stay where it is. I’d like to be a lot more confident and say that milk price is going to take off and be into the mid-40c/l [bracket].
“But at the moment it’s a thin market and buyers have stepped back, so it needs demand to push on due to some event or whatever, for milk price to push on,” he said.
On nitrates, Harte said that losing the derogation would be “absolutely devastating for suppliers and for the co-op”.
He said that currently there are 40% of suppliers operating below 170kg organic N/ha, another 40% operating at between 170kg and 220kg N/ha, with 20% stocked higher than 220kg N/ha.
“The entire dairy industry is hinging on the nitrates derogation being retained.
“We have a team of people engaged at national and local level and 93% of our suppliers are involved in the Dairygold sustainability programme.
“The Government really needs to build relationships with EU counterparts.
“We need time for the body of work done over the last few years to be implemented, as there is a time lag on water quality, and we need these results to be presented to the [European Commission],” he said.
Milk supply reduction
Harte said that a reduction in milk supplies is high up on the company’s risk register as a threat to the business.
Between retiring farmers and new entrants Dairygold has 34 fewer milk suppliers in 2024.
He said up to now those retiring have been replaced by new entrants, but new entrant numbers are now lower.
As part of a contractual arrangement with Tirlán, Dairygold will continue to process some of Tirlán’s supplies for 2024 and 2025.
Both Dairygold Co-op and its joint venture Munster Bovine are currently seeking new CEOs, with Dairygold chair Seán O’Brien saying it’ll be later this year before a new Dairygold CEO is appointed.
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