Milk suppliers will take a keen interest in milk prices, but less of an interest in financial results.
They should take as much, if not more, interest in the annual company results.
The financial results of 2020 are being released and it’s fair to say the numbers are improved all round compared with 2019.
It is fair to say 2020 was a good year for dairy despite the COVID-19 challenges and the processors did well to keep the show on the road.
I’ll say it was a decent year on milk prices, so any year that you get good returns to the business and the suppliers must be marked down as a good year overall.
Lakeland seems to be settling into a stride in Northern Ireland and, between north and south, it now has scale and flexibility in product more so than it had.
In the northwest, Aurivo had a good year in 2020 and it has more challenges than some dairy businesses, given it covers a large geographical area with smaller herd sizes, a mart business and an agri store business that was COVID-impacted more so than some other businesses.
Glanbia is dealing with the fall-out on peak milk schemes, as planning delays halt progress in the southeast.
Kerry Co-op and Kerry Group have decided to go their separate ways and we await developments to see what will happen next in the southwest. There is a bit to go yet in this story for both parties.
Dairygold, the other dairy business that has grown substantially in the last number of years, also delivered a strong set of financial results and seems more comfortable in processing capacity than Glanbia.
The challenge for Dairygold, and it is not alone in this one, is to add more value to the product rather than be ingredient suppliers.
There is going to be a new captain of the ship to steer Dairygold on that journey with the announcement that Jim Woulfe is stepping down in the autumn.
So while the dairy industry at a high level looks strong, and is strong, it remains open to challenge from European policy.
Particularly on the environmental side, there will be challenge and a shift to other protein sources.
The tools to meet the environmental challenges are not yet as clear.
One of the core drivers of the grass system is nitrogen and the solution to a lower nitrogen system allowing commercial grassland stocking rates is not as clear.