‘Dairy markets to improve gradually in 2016’

A gradual improvement in dairy market conditions in 2016 is expected once global stocks begin to clear, Lakeland Dairies CEO Michael Hanley has said.

He made the comment in his Christmas and New Year message to milk producers.

“Lakeland Dairies has continued to put in the groundwork required to ensure long term sustainability and continuing growth and development in an increasingly globalised and often volatile dairy marketplace.

“This includes investments in new milk processing capacity, larger scale and an efficiency and cost reduction programme across all operations,” he said.

Hanley said that dairy markets have been challenging due to several factors coming into play at the same time.

“This has included the abolition of the EU quota system and increased production by European farmers, the Russian ban on EU dairy products and a global oversupply from dairy producing countries.

“The major dairy importers and traders across every continent have taken advantage of lower prices to increase their stock of dairy products over the past year and this will take some time to wash through the system.

Overall we anticipate that there will be a gradual improvement in market conditions once global stocks begin to clear.

“During the year we acquired Taste Trends in the UK, started our investment in Bailieboro Dryer Number Three and opened our new Global Logistics Centre in Newtownards.

“In spite of the current market volatility, we are making strong progress overall. We have 170 different products and these go to 77 countries worldwide.

“Our foodservice division makes over 100,000t of dairy products and 700m individual product units each year.

“In the Food Ingredients sector, we supply hundreds of major food industry customers with ingredients and the world’s top infant nutrition companies with the highest quality milk powders,” he said.

Hanley said that Lakeland Dairies will be the second largest dairy processing co-operative on the island of Ireland in 2016, with a milk pool of over 1.1 billion litres.

“That will further enhance efficiencies across our entire processing footprint. Indicatively, that level of milk throughput will yield 160,000t of powders a year and over 30,000t of butter, in addition to our dairy foodservice output.

“All of these developments have been achieved from existing resources off the back of a strongly performing and well managed business.

“There have been no share-ups, levies or funding demands placed on our milk producers.

“As a farmer owned co-operative, we are intent on delivering value to our milk producers with as high a milk price that we can possibly pay, in line with market conditions. That will always continue to be our commitment.

“Notwithstanding the challenges of the past year, Lakeland Dairies is strategically and positively positioned to support our milk producers on a long term and sustainable basis into the future,” Hanley said.