This is a subscriber-only article
A new €3.75m feed mill extension was officially opened by An Taoiseach Leo Varadkar in Drinagh Co-op, Co Cork, on Friday.
Speaking at the opening, An Taoiseach commented on the timely opening of the new feed mill given that two extreme weather events this year have increased demand for animal feed.
Listen to "Doubling feed capacity at Drinagh Co-op" on Spreaker.
It was a sentiment echoed by Drinagh CEO Joe O'Sullivan, who said that current drought conditions have almost doubled demand for feed compared to this time last year.
West Cork is a renowned dairy region and the new feed mill is aimed at supporting expansion in the area.
"This investment will stand us in good stead for many years to come," O'Sullivan told the Irish Farmers Journal.
"This has doubled our production, from about 60,000t to 120,000t."
O'Sullivan also commented that many farmers were finding drought conditions difficult on top of the prolonged spring, with some farmers considering their herd numbers.
"What I see now from the difficulties from the spring and the summer are guys taking stock and maybe thinking of cutting back.
I think our price now is over the market, but hopefully if the market comes up a bit we can sustain this price for the autumn
"But then again farmers have a short memory if this present drought sorted itself out and if they got a good autumn and a good milk price then I think they’d look at next year a different way but I think they’re going to take stock in terms of potential into the future."
With an ongoing discussion around genetically modified (GM) feed and a growing consumer awareness and concern around processed or organic food, O'Sullivan pointed out that the west Cork co-op was considering future options around the feed issue.
"That’s [GM feed] been looked at in the whole west Cork scenario in terms of GM feed and there’s a working group looking at that at the moment. We’ll see what comes out of it," O'Sullivan said, adding that he had hopes that milk prices would continue to strengthen.
"There are some signs now that the market is firming up.
"I think our price now is over the market, but hopefully if the market comes up a bit we can sustain this price for the autumn, and if that happens, who knows, maybe next spring might be on the same level, so it’s somewhat positive in terms of the whole supply and demand situation in the world.
"The positives are slightly stronger than the negatives."
The whole Brexit thing is so mixed up right now that you’re better off not even thinking about it
Brexit concerns
With a large proportion of the co-op's milk going to make cheese for Carbery that will be sold in the UK, Brexit remains a major issue for the co-op. But O'Sullivan pointed out that it's hard to plan for something that hasn't been decided yet.
"It’s a huge source of concern to us because in west Cork especially, through Carbery Food Ingredients, we’re very dependent on cheddar cheese going to the UK market," O'Sullivan told the Irish Farmers Journal.
"But the whole Brexit thing is so mixed up right now that you’re better off not even thinking about it, we have to plan for the worst, we have to look at product fix and maybe less dependence on cheddar cheese."
The overhanging stocks of skimmed milk powder (SMP) are also an area of concern and O'Sullivan has welcomed the announcement that the European Commission is to start selling two lots a month from the 280,000t stored in intervention.
"Anything that’ll get rid of some that stock, that stock is overhanging the market, causing a negative effects," O'Sullivan said.
"It would be great to see two quotations a month and hopefully get the stock down and we can look forward then to next year with a bit of optimism again."
SHARING OPTIONS: