200 new entrants join Lakeland in last half-decade

Around 200 farmers new to dairying joined the island’s second largest dairy co-operative over the last five years.

The figure was revealed as Lakeland Dairies announced its latest annual results today – and includes 30 farmers new to the industry who joined in 2017.

A spokesman confirmed that the 200 are split almost 50:50 between Northern Ireland and the Republic of Ireland.

The accounts released earlier today showed that, in 2017, the firm’s profits doubled while revenue rose by a third.

However, Lakeland’s February milk price saw a drop of 1c/L, resulting in it paying 28p/L in Northern Ireland and 34.56c/L including VAT and lactose bonus in the Republic. The milk price for March is expected to be decided tomorrow.

The firm processed 1.2 billion litres over the year supplied by 2,500 farmers – two figures which have seen significant growth over the last year.

Around 750 of the firm’s suppliers are based in Northern Ireland, with the remaining two-thirds based in the Republic.

However, the firm’s northern farmers supply, on average, almost three times as much milk as those in the south – spreading the supply pool almost equally across both sides of the border.

As well as the newcomers, Lakeland Dairies chairman Alo Duffy said many established suppliers were intending to expand their herds.

‘Sustainable, profitable dairy farming’

“Supplier research undertaken in 2017 indicates that our milk producers will continue to expand output by 4-5% annually over the next five years,” he said.

“We also welcomed 30 new entrants to milk production during 2017 – totalling 200 new entrants since 2013.

This continued growth has been driven by strategically-guided programmes and initiatives that have yielded efficiencies across our operations, increased volumes and enhanced the overall quality of our offering.

“This continued growth has been driven by strategically-guided programmes and initiatives that have yielded efficiencies across our operations, increased volumes and enhanced the overall quality of our offering.

“Our strategic priority will always be to achieve sustainable, profitable dairy farming and we believe that we are well positioned to remain resilient and to achieve future success in the long term.”

As well as its milk pool growing, the firm has also seen an increase in sales.

‘Able to process more milk than ever’

Michael Hanley, group chief executive, said all sectors of the business saw performance increase.

“Trading conditions were helped by a reduction in global milk supplies and product availability,” he said.

Michael Hanley, chief executive, Lakeland Dairies“While there are challenges in the global market, it is our intention to continue to drive competitiveness and overall growth, targeting opportunities across infant formulas, dairy proteins and health-related nutritional products.

“With the investments we have made, we are now in a position to process more milk than ever before. We are focused on business performance improvements through continuous innovation, organisational development and further enhancements in operational efficiency.”

Areas of growth

Food ingredient sales was one of the strongest areas of growth, increasing by a third to €468.4 million (£415.5 million) in 2017.

The firm’s ‘Bailieboro Dryer Number Three’ development was officially opened in 2017 with upgrades also made to: research and development; milk intake; storage; and separation facilities at the site.

Overall, the site produced record volumes totalling more than 200,000t of milk powders and butter products for worldwide export during the year.

Similarly, food-service sales also were up by 23% to €239.8 million (£212.7 million) in 2017.

Lakeland’s major processing centres at Newtownards and Killeshandra continue to increase output year on year, producing record volumes of butter products, ice cream, cream and cream blends.

The firm also reported that key markets – such as the UK, Middle-East, Europe, Asia and China – also performed well against a backdrop of volatile commodity input costs, the need to increase selling costs and intense competition.

During the year, the firm also invested in new technology and rolled out an expansion at its Lough Egish Feed Mill.