The key topic discussed at last Saturday’s Dairy Day session with the co-op chairs was collaboration and consolidation between the co-ops.
When Arrabawn Tipperary chair Edward Carr said that they identified €10m in savings over two years and have realised €6m to €7m of these savings already, it got the crowd thinking. If the same metric was applied across the entire milk pool, that’s a saving of €120m annually, which is worth 1.3c/l on every litre processed. Some in attendance said the savings could be double that.
We’ve had this discussion around industry consolidation before, but nothing has really happened to any great degree. All of the chairs said they were collaborating with each other, yet Tirlán announced just last Friday that it was expanding its whey plant at Ballyragget, but doing it alone. I’ve a feeling Dairygold would only love to be able shift some of its whey stream into high-value whey protein isolate and away from demineralised whey.
The federal approach to milk processing was mentioned by a few speakers, whereby co-ops retain their identity, but milk processing and marketing is collectivised, like the Carbery model.
The question is, will this model achieve the required cost savings if each co-op has a board and an executive team and then another board and executive team on the milk processing company?
If you asked a milk supplier today would they would prefer to keep the co-op name on the milk lorry or get a higher price for that milk, I’d say the vast majority would go for the latter.
The key topic discussed at last Saturday’s Dairy Day session with the co-op chairs was collaboration and consolidation between the co-ops.
When Arrabawn Tipperary chair Edward Carr said that they identified €10m in savings over two years and have realised €6m to €7m of these savings already, it got the crowd thinking. If the same metric was applied across the entire milk pool, that’s a saving of €120m annually, which is worth 1.3c/l on every litre processed. Some in attendance said the savings could be double that.
We’ve had this discussion around industry consolidation before, but nothing has really happened to any great degree. All of the chairs said they were collaborating with each other, yet Tirlán announced just last Friday that it was expanding its whey plant at Ballyragget, but doing it alone. I’ve a feeling Dairygold would only love to be able shift some of its whey stream into high-value whey protein isolate and away from demineralised whey.
The federal approach to milk processing was mentioned by a few speakers, whereby co-ops retain their identity, but milk processing and marketing is collectivised, like the Carbery model.
The question is, will this model achieve the required cost savings if each co-op has a board and an executive team and then another board and executive team on the milk processing company?
If you asked a milk supplier today would they would prefer to keep the co-op name on the milk lorry or get a higher price for that milk, I’d say the vast majority would go for the latter.
SHARING OPTIONS