The Irish dairy industry has performed very well over the last 10 years, mapping a route for increasing processing capacity as farmers expanded with the abolition of the EU quota.
If we remember, the foundation for this expansion was developed as far back as 2010 – the industry knew in 2007 that quotas were on the way out.
The Department moved to allow quota free up, with the introduction of new entrant quota, reducing the value of quota and farmers moved by increasing stock numbers, putting more and better-quality stock on farms.
Processors moved to put more capacity in place with funding structures and plans developed to allow them take the extra milk.
The question must be asked where next for co-ops? What will be the big driver for the next 10 years? Who will be making the decisions?
Yes, there will still be some natural growth and retirement. Yes, there will be some conversions and on-farm expansion, but you would expect not on the scale we have seen over the last 10 years.
Discussion in New Zealand
I see in New Zealand this discussion has started on how to restructure the business, as they move to plan for lower volumes into the future.
Changes being considered include adjusting the minimum shareholding and letting sharemilkers and contract milkers to own shares.
Feedback has been gathered from over 5,000 farmer members. Farmers have called for information and a strategy from management.
There isn’t much of an outcome yet, but at least farmers are engaged, have the ability to voice an opinion, have more information and feel part of the process, rather than just agree or disagree with the milk price announcement.
We need some real innovation in Ireland and engagement with milk processors to drive the next generation into mapping a vision for the next 10 years.