Tirlán held a meeting in Dungarvan last Wednesday. It was the first in a round of meetings that continue through to next Wednesday (18 January). And it was a meeting of two distinct halves.
The first phase involved addresses by chair John Murphy, CEO Jim Bergin and chief operating and consumer officer Jim O'Neill.
Between them, they gave a comprehensive overview of everything happening in the co-op in recent times. COVID and lockdowns meant quite a lot had happened since the last such meetings.
I covered some of the issues in an article in this week's paper.
Success story
It is worth repeating the extent of the success story that Tirlán - the co-op - represents. In little over a decade, it has established the Glanbia Ireland joint venture with Glanbia plc, built Belview, bought Wexford Creamery, added the Irish agribusiness and consumer foods divisions to the fold and bought out the plc's 40% shareholding of the joint venture to become outright owners of the entire Irish business. The milk pool has expanded from about 1.8bn litres to over 3bn litres. All that milk is being processed and sold worldwide in a bewildering variety of markets and products.
And this has been done while retaining 28% of the co-op's shareholding in Glanbia plc, and also spinning out €900m of shares to the co-op's members. For context, this retained shareholding represents about half the 55% of shares the co-op held in Glanbia plc in 2010.
At that time, the original 'Dairy Ireland' plan would have seen the co-op buy the Irish dairy business, but their plc shareholding would have shrunk to 10% through a combination of the cost of the purchase and the spin-out of shares. So things have worked out pretty well in the end.
Back then, current Tirlán chair John Murphy was a newly elected member of the Glanbia Co-op board. He opposed the plan, being quoted in the Irish Farmers Journal the week before the decisive vote.
He was again on the opposite side to Glanbia management and most of the board when the joint venture proposal was successfully mooted in late 2013.
All water under the bridge.
When we moved to the second half of the meeting, it became apparent that there is no gap in thinking today between John Murphy and Tirlan management on one topical issue.
For as the questions relating to fixed milk prices rained in, they stood shoulder to shoulder.
All that could be done had been done, said Murphy. It was the issue that has dominated the board's time and resources more than any other. Eleven cent per litre of support had been put in place, added Bergin (a figure hotly disputed by farmers from the floor). The supports extend to €25m, not enough for some but way too much for others, Murphy said.
The co-op had offered every support, with one-on-one meetings for suppliers a level of engagement "way beyond other processes" said Bergin.
Earlier meeting
I had attended a meeting on the same vexed question of Tirlán's fixed milk price schemes the previous Friday, in the Newpark Hotel in Kilkenny. It was organised by the Irish Farmers' Association (IFA), chaired by IFA president Tim Cullinan and saw 200 people turn up.
The Kilkenny meeting resembled the Dungarvan meeting in that it had two distinct phases. The first was a comprehensive presentation from Karol Kissane relating to the fixed milk price support scheme, outlining the changes made to the scheme by Tirlán about a month ago.
This was complex and there's no need to go into it here. Suffice it to say that anyone who was considering accepting the scheme received a decent insight into it.
Of course, every supplier with over 35% of their milk fixed in 2022 has been talked through their options in a one-to-one meeting.
So why was a public meeting necessary? Because these suppliers don't trust their co-op any more. They certainly don't trust a private briefing.
As one said to me: "I was advised by my co-op adviser, in my own kitchen, in relation to entering fixed milk price schemes. I made my own decision based in part on that advice, given from some one I trusted. Now I'm being told that conversation never happened. How can I trust this latest conversation?"
Timelines
The deadline for the fixed milk price support scheme has itself been a source of frustration and some confusion for affected farmers. Initially, the scheme introduced in April was due to close in November. Following constant criticism from farmers, the scheme was amended, with a closing date of 20 December.
As that deadline approached, some farmers had still not received offer letters. These letters outlined how availing of the scheme would affect them, in terms of volume of milk in the fixed price support scheme in each year of 2022, 2023 and 2024, the volume of milk still remaining in each of the various original fixed milk price schemes and the price for the fixed milk.
Tirlán indicated that there would be some flexibility, but that the scheme had to close
With four schemes running concurrently through 2022 - and farmers involved in one, some or all four of these schemes to varying degrees - every case is different in how the scheme applies to their circumstances.
The deadline was then extended to 30 December and Tirlán committed to making direct contact with every affected farmer to talk them through their options before Christmas.
Farmers still weren't happy. They said they couldn't get independent advice during the Christmas holidays. Tirlán indicated that there would be some flexibility, but that the scheme had to close.
Believing that the deadline for entering the scheme would have passed before the round of regional meetings Tirlán was organising began, farmers decided they needed their own public meeting and thus the IFA organised the Kilkenny meeting for 6 January.
The notice of the meeting organised by the IFA for Tirlán suppliers that was published in the Irish Farmers Journal's 31 December 2022 edition. Note the explicit invitation to the meeting extended to Tirlán's management and board.
A notice to that effect was published in the Irish Farmers Journal on 31 December, which hit shops on Thursday 29 December (and phones, tablets and laptops the previous evening).
My guess is that Tirlán's leadership thought the meeting in Kilkenny would be poorly attended and that would kill off the campaign for more assistance.
If that was their assumption, they were mistaken. About 200 people attended. It was a different group of people to the previous meeting in Carlow last October. None of the board attended. Farmers, shareholders, suppliers, elected to represent their fellow farmers, suppliers, shareholders in a co-operative. Yes, to ensure the business is run successully and profitably. Yes, to work closely with management to devise and enact a successful strategy for growth and investment in the business. By these metrics Tirlán have achieved undeniable sustained success and expansion. It continues, 73 new entrants will delvier milk for the first time in 2023.
But also, yes, to represent farmers on the board, and to engage downwards with fellow farmers, shareholders, suppliers, to hear them in a public forum, and to show that the board is listening and is engaging. "where two or three are gathered...."
One person speaking from the floor introduced themselves as being on Tirlán's council and expressed his disappointment at the no-show from the board.
Speaking in Dungarvan the following Wednesday, Tirlán's CEO Jim Bergin said that while they didn't attend, Tirlán had assisted the IFA in preparing for their Newpark meeting.
That's management, and that is understandable.
Why the need for a meeting at all
The irony is that the deadline for entry into the fixed milk price support scheme has now belatedly been extended until next Friday 20 January, after the full round of Tirlán's own meetings.
If such an extension had been confirmed before Christmas, the IFA would probably never have organised a meeting themselves.
It would have given farmers the two things they told me they were seeking - time to consult an independent adviser about the implications of accepting the fixed milk price support scheme offer and an opportunity to engage on the matter in a public forum.
Having dealt with the fixed milk price support scheme, the meeting was opened to the floor. It quickly became apparent that farmers didn't want to focus further on that scheme. It has been accepted gratefully by some, but there is a catch- farmers are fixed into a fixed milk price for some milk at 38c/l through all of 2024.
The current expectation is that prices will fall this year, the main question is how much. And the current expectation is that the spike of 2022 is unlikely to be seen in 2024. It may not be seen for a generation.
However, there is a phenomenon known as the double dip, where falling markets appear to bottom out, start to rise, only for a second collapse with catastrophic consequences. We saw this in financial markets in 2007-08, both globally and here in Ireland.
The opposite- a double spike- is also possible, although less likely. If the war in Ukraine was to escalate, if fertiliser was to become globally scarce or expensive due to natural gas shortages, we could see last year's unique circumstances recreated. It might be a low percentage possibility, but if it happened, it could break the farmers who were in the Newpark Hotel.
What farmers wanted was to push for an extension of the input support scheme.
This ingenious payment is paid surplus to basic milk price - fixed or floating - on all Tirlán's milk.
It's been in place since April and averaged 4.5c/l or so for every litre of milk delivered in 2022. It is in place for January to March 2023 at 6.5c/l, with a commitment that it will be maintained at some level until June.
What farmers called for was this to be extended right through 2023 at 6.5c, bringing the base price of milk in fixed schemes up from 32c/l to 38.5c/l, close to or at the cost of production.
Good order
As this idea coalesced and solidified during the meeting, there followed the parallel proposal that a payment be considered for all 2022 fixed milk. If this payment were 2c/l, it would match the 6.5c/l current support level.
The meeting was conducted in good order. People spoke seriously and sincerely, there was less emotion than last October. The sense was that farmers want to reach a final agreement with their co-op and move on.
The same sense pervaded at the following Wednesday's meeting. Perhaps we are closer to a resolution to this saga than might appear to the casual observer. It wouldn't be before time.
It seems less able to resolve the issues surrounding fixed milk price schemes
Of course, such a measure would cost Tirlán a lot of money, but I was struck by one aspect of Wednesday's meeting.
Jim O'Neill spoke of the progress made toward the rollout of the new plant for Kilkenny Cheese Limited (KCL) - the new joint venture between Tirlán and Dutch cheese giant Royal A-ware.
The new plant will be operational in January 2024, we were told. Tirlán will supply the milk to the plant and when the cheese is produced, Royal A-ware will sell it.
The delay in the plant's construction caused by the legal challenge brought by An Taisce against its planning was referred to in passing. This delay has cost many millions, not only in legal costs, but also in escalated building costs due to recent pandemic- and war-induced inflation.
Tirlán seems to have brushed this off and got on with it. Yet, it seems less able to resolve the issues surrounding fixed milk price schemes.
One farmer speaking in Dungarvan said something along the lines of 'many of us involved in these fixed price schemes are young farmers, new entrants, under 40. We are the future of this co-op, and you (board and management) are endangering that future when you endanger our future'.
Tirlán held a meeting in Dungarvan last Wednesday. It was the first in a round of meetings that continue through to next Wednesday (18 January). And it was a meeting of two distinct halves.
The first phase involved addresses by chair John Murphy, CEO Jim Bergin and chief operating and consumer officer Jim O'Neill.
Between them, they gave a comprehensive overview of everything happening in the co-op in recent times. COVID and lockdowns meant quite a lot had happened since the last such meetings.
I covered some of the issues in an article in this week's paper.
Success story
It is worth repeating the extent of the success story that Tirlán - the co-op - represents. In little over a decade, it has established the Glanbia Ireland joint venture with Glanbia plc, built Belview, bought Wexford Creamery, added the Irish agribusiness and consumer foods divisions to the fold and bought out the plc's 40% shareholding of the joint venture to become outright owners of the entire Irish business. The milk pool has expanded from about 1.8bn litres to over 3bn litres. All that milk is being processed and sold worldwide in a bewildering variety of markets and products.
And this has been done while retaining 28% of the co-op's shareholding in Glanbia plc, and also spinning out €900m of shares to the co-op's members. For context, this retained shareholding represents about half the 55% of shares the co-op held in Glanbia plc in 2010.
At that time, the original 'Dairy Ireland' plan would have seen the co-op buy the Irish dairy business, but their plc shareholding would have shrunk to 10% through a combination of the cost of the purchase and the spin-out of shares. So things have worked out pretty well in the end.
Back then, current Tirlán chair John Murphy was a newly elected member of the Glanbia Co-op board. He opposed the plan, being quoted in the Irish Farmers Journal the week before the decisive vote.
He was again on the opposite side to Glanbia management and most of the board when the joint venture proposal was successfully mooted in late 2013.
All water under the bridge.
When we moved to the second half of the meeting, it became apparent that there is no gap in thinking today between John Murphy and Tirlan management on one topical issue.
For as the questions relating to fixed milk prices rained in, they stood shoulder to shoulder.
All that could be done had been done, said Murphy. It was the issue that has dominated the board's time and resources more than any other. Eleven cent per litre of support had been put in place, added Bergin (a figure hotly disputed by farmers from the floor). The supports extend to €25m, not enough for some but way too much for others, Murphy said.
The co-op had offered every support, with one-on-one meetings for suppliers a level of engagement "way beyond other processes" said Bergin.
Earlier meeting
I had attended a meeting on the same vexed question of Tirlán's fixed milk price schemes the previous Friday, in the Newpark Hotel in Kilkenny. It was organised by the Irish Farmers' Association (IFA), chaired by IFA president Tim Cullinan and saw 200 people turn up.
The Kilkenny meeting resembled the Dungarvan meeting in that it had two distinct phases. The first was a comprehensive presentation from Karol Kissane relating to the fixed milk price support scheme, outlining the changes made to the scheme by Tirlán about a month ago.
This was complex and there's no need to go into it here. Suffice it to say that anyone who was considering accepting the scheme received a decent insight into it.
Of course, every supplier with over 35% of their milk fixed in 2022 has been talked through their options in a one-to-one meeting.
So why was a public meeting necessary? Because these suppliers don't trust their co-op any more. They certainly don't trust a private briefing.
As one said to me: "I was advised by my co-op adviser, in my own kitchen, in relation to entering fixed milk price schemes. I made my own decision based in part on that advice, given from some one I trusted. Now I'm being told that conversation never happened. How can I trust this latest conversation?"
Timelines
The deadline for the fixed milk price support scheme has itself been a source of frustration and some confusion for affected farmers. Initially, the scheme introduced in April was due to close in November. Following constant criticism from farmers, the scheme was amended, with a closing date of 20 December.
As that deadline approached, some farmers had still not received offer letters. These letters outlined how availing of the scheme would affect them, in terms of volume of milk in the fixed price support scheme in each year of 2022, 2023 and 2024, the volume of milk still remaining in each of the various original fixed milk price schemes and the price for the fixed milk.
Tirlán indicated that there would be some flexibility, but that the scheme had to close
With four schemes running concurrently through 2022 - and farmers involved in one, some or all four of these schemes to varying degrees - every case is different in how the scheme applies to their circumstances.
The deadline was then extended to 30 December and Tirlán committed to making direct contact with every affected farmer to talk them through their options before Christmas.
Farmers still weren't happy. They said they couldn't get independent advice during the Christmas holidays. Tirlán indicated that there would be some flexibility, but that the scheme had to close.
Believing that the deadline for entering the scheme would have passed before the round of regional meetings Tirlán was organising began, farmers decided they needed their own public meeting and thus the IFA organised the Kilkenny meeting for 6 January.
The notice of the meeting organised by the IFA for Tirlán suppliers that was published in the Irish Farmers Journal's 31 December 2022 edition. Note the explicit invitation to the meeting extended to Tirlán's management and board.
A notice to that effect was published in the Irish Farmers Journal on 31 December, which hit shops on Thursday 29 December (and phones, tablets and laptops the previous evening).
My guess is that Tirlán's leadership thought the meeting in Kilkenny would be poorly attended and that would kill off the campaign for more assistance.
If that was their assumption, they were mistaken. About 200 people attended. It was a different group of people to the previous meeting in Carlow last October. None of the board attended. Farmers, shareholders, suppliers, elected to represent their fellow farmers, suppliers, shareholders in a co-operative. Yes, to ensure the business is run successully and profitably. Yes, to work closely with management to devise and enact a successful strategy for growth and investment in the business. By these metrics Tirlán have achieved undeniable sustained success and expansion. It continues, 73 new entrants will delvier milk for the first time in 2023.
But also, yes, to represent farmers on the board, and to engage downwards with fellow farmers, shareholders, suppliers, to hear them in a public forum, and to show that the board is listening and is engaging. "where two or three are gathered...."
One person speaking from the floor introduced themselves as being on Tirlán's council and expressed his disappointment at the no-show from the board.
Speaking in Dungarvan the following Wednesday, Tirlán's CEO Jim Bergin said that while they didn't attend, Tirlán had assisted the IFA in preparing for their Newpark meeting.
That's management, and that is understandable.
Why the need for a meeting at all
The irony is that the deadline for entry into the fixed milk price support scheme has now belatedly been extended until next Friday 20 January, after the full round of Tirlán's own meetings.
If such an extension had been confirmed before Christmas, the IFA would probably never have organised a meeting themselves.
It would have given farmers the two things they told me they were seeking - time to consult an independent adviser about the implications of accepting the fixed milk price support scheme offer and an opportunity to engage on the matter in a public forum.
Having dealt with the fixed milk price support scheme, the meeting was opened to the floor. It quickly became apparent that farmers didn't want to focus further on that scheme. It has been accepted gratefully by some, but there is a catch- farmers are fixed into a fixed milk price for some milk at 38c/l through all of 2024.
The current expectation is that prices will fall this year, the main question is how much. And the current expectation is that the spike of 2022 is unlikely to be seen in 2024. It may not be seen for a generation.
However, there is a phenomenon known as the double dip, where falling markets appear to bottom out, start to rise, only for a second collapse with catastrophic consequences. We saw this in financial markets in 2007-08, both globally and here in Ireland.
The opposite- a double spike- is also possible, although less likely. If the war in Ukraine was to escalate, if fertiliser was to become globally scarce or expensive due to natural gas shortages, we could see last year's unique circumstances recreated. It might be a low percentage possibility, but if it happened, it could break the farmers who were in the Newpark Hotel.
What farmers wanted was to push for an extension of the input support scheme.
This ingenious payment is paid surplus to basic milk price - fixed or floating - on all Tirlán's milk.
It's been in place since April and averaged 4.5c/l or so for every litre of milk delivered in 2022. It is in place for January to March 2023 at 6.5c/l, with a commitment that it will be maintained at some level until June.
What farmers called for was this to be extended right through 2023 at 6.5c, bringing the base price of milk in fixed schemes up from 32c/l to 38.5c/l, close to or at the cost of production.
Good order
As this idea coalesced and solidified during the meeting, there followed the parallel proposal that a payment be considered for all 2022 fixed milk. If this payment were 2c/l, it would match the 6.5c/l current support level.
The meeting was conducted in good order. People spoke seriously and sincerely, there was less emotion than last October. The sense was that farmers want to reach a final agreement with their co-op and move on.
The same sense pervaded at the following Wednesday's meeting. Perhaps we are closer to a resolution to this saga than might appear to the casual observer. It wouldn't be before time.
It seems less able to resolve the issues surrounding fixed milk price schemes
Of course, such a measure would cost Tirlán a lot of money, but I was struck by one aspect of Wednesday's meeting.
Jim O'Neill spoke of the progress made toward the rollout of the new plant for Kilkenny Cheese Limited (KCL) - the new joint venture between Tirlán and Dutch cheese giant Royal A-ware.
The new plant will be operational in January 2024, we were told. Tirlán will supply the milk to the plant and when the cheese is produced, Royal A-ware will sell it.
The delay in the plant's construction caused by the legal challenge brought by An Taisce against its planning was referred to in passing. This delay has cost many millions, not only in legal costs, but also in escalated building costs due to recent pandemic- and war-induced inflation.
Tirlán seems to have brushed this off and got on with it. Yet, it seems less able to resolve the issues surrounding fixed milk price schemes.
One farmer speaking in Dungarvan said something along the lines of 'many of us involved in these fixed price schemes are young farmers, new entrants, under 40. We are the future of this co-op, and you (board and management) are endangering that future when you endanger our future'.
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