The news that an Australian dairy processor has collapsed is a stark reminder of how perilous the economics of agri-food companies can be.

Mundella wasn’t the biggest of processors and handled small volumes in Western Australia alongside its sister companies.

But tell that to any farmer faced with getting no milk cheque at all in 2026.

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One of them, Phil Hughes, told ABC News he was selling up after six generations of dairy farming. Interestingly, Hughes attached no blame to Mundella or its sole director, Hayden Russell.

Hughes pointed out that Russell was prepared to pay AU$0.90/l (€0.55/l). This was much more than any other processor was prepared to pay, with the market otherwise at AU$0.78/l.

From the outside, paying that much over the odds for milk seemed doomed to fail.

But in a competitive environment, a new player has to attract suppliers, so the risk can be deemed worthwhile.

Irish dairy farmers might think the domestic milk market could do with a similar shake-up, but competition between processors on price has never really featured.

This may mean prices trundle along most of the time, but it also means the Irish co-ops processing milk have proven remarkably stable.

Of course, there has been some recent rationalisation. It was probably necessary, and it almost certainly isn’t over.

But the key to the certainty Irish dairy farmers have is structure. Our dairy processors are owned by the suppliers and their fellow farmers.

The boards of our co-ops are dominated by suppliers, who have been elected or selected by the shareholders.

This structure provides accountability and prudence.

Irish co-ops have never entered a bidding war for milk, something we have seen at times across the continent and in the UK.

This was true even in the supply-restricted quota era; there was a non-aggression pact among processors – a détente.

Of course, there are two elements to delivering a consistent margin on milk that keeps a dairy co-op’s finances healthy.

The first is the price you buy at; the second is the price you sell product at.

When quotas ended and milk production dramatically increased, there were three concerns. Would enough steel be erected quickly enough to cope with supplies? Would farmers be heavily levied to pay for processing? And, thirdly, would co-ops compete among themselves for sales of the extra volume of dairy commodities?

Some would say the recent issues between Tirlán and Ornua regarding butter in the US mean that the last question is still a live one.