Arrabawn Co-op has already achieved its 2020 milk supply targets, some three years ahead of schedule, according to the co-op’s CEO, Conor Ryan.
Speaking at the co-op’s AGM last week, Ryan told suppliers that Arrabawn has now embarked on a capacity review, with the likelihood of further investment, as a result of these targets being met in 2017.
Significant investments over the past four years have seen the co-op’s capacity grow by over 45%.
The increase in milk supply in the post-quota era has meant that Arrabawn must now recalibrate its capacity plans to cater for greater supplies again.
At the AGM, Ryan told suppliers that milk supply has increased more than was anticipated and that the co-op will have to adjust its capacity plans accordingly.
“We’ve reached our 2020 target capacity in 2017. As we stand at the moment, we have an immediate plan that would give us another 10% headroom; but the longer-term plan for 2020 needs to be reviewed and we need to ensure we have increased capacity.
Previously, we had expected supply to increase slightly this year but it’s increasing faster than we had anticipated.
“We need to come up with a concrete plan over the next few months to deal with this. Our Kilconnell site has capacity, but our Nenagh site is the one that will need capacity adjustment,” Ryan said.
Positive outlook
Arrabawn has enjoyed a strong start to 2017, according to the co-op’s CEO; feed and fertiliser have been key drivers of this strong start, with the outlook on both feed and fertilisers prices remaining positive, he added.
For the year-to-date, the co-op is up 6.4% on milk and is currently running at 7% plus week-on-week, Ryan said.
“Overall, EU prices have stabilised; though butter is probably driving it on longer than we expected.
With milk prices, we would be reasonably confident that current price levels are sustainable over the next few months.
Bord Bia Sustainability Scheme
At the AGM, Ryan also revealed that currently 97.7% of Arrbawn suppliers are participating in the Bord Bia Sustainability Scheme.
This figure has increased from 53% of its suppliers just one year ago, he added.
“There’s a lot of money involved for the good of the Irish farmer, so this scheme is at a critical juncture.
“The next six months will determine whether it’s a success and it would be a terrible pity for the sake of 1% not being committed or involved, that the other 99% would suffer,” he said.