Glanbia’s Director of Strategy Sean Molloy told delegates attending the Dairy Ireland Conference that the family farm will remain the fundamental building block of the Irish dairy industry over the coming years.
“But what we see today, in terms of farm structure, may well be significantly different 10 years time. Dairy farms will be more specialised. Keeping beef cattle as a subsidiary enterprise may well have become a thing of the past. We will also see a fundamental change in land tenure over the next 10 years. Land ownership will no longer be the key driver in terms of farm business structure: rather increasing numbers of active farmers will want to enter into long-term leasing arrangements in order to secure the scale of operation they require in order to remain viable.”
Sean Molloy admitted that steps must be taken to allow milk producers deal more effectively with the challenge of price volatility.
“Contracts are certainly an option in this regard,” he said.
“And, yes, we would seek to develop contract arrangements that would link farmgate returns and input costs.”
Turning to the development of the new Glanbia milk drying plant at Belview in south Kilkenny, Sean Molloy said that the development of the €200 million facility remains on schedule.
“Two seven and a half tonne dryers will be brought on stream. However, this capacity can be doubled up at times of peak capacity.
“Our business plan is to make optimal use of Belview the year round. Initially this will require an internal re alignment of the existing Glanbia plants. However, we will also seek to develop new milk supply arrangements with other processers, in ways that fully complement their business models.
“But there will also be a requirement for Glanbia to procure additional supplies of milk off – farm the year round. And, of course, this brings into focus the need to encourage higher levels of winter milk production throughout our catchment area.”