ICOS says structure of dairy sector is fundamentally sound

Maintaining the highest levels of structural stability within the Irish dairy sector will be critically important for the industry as a whole, according to ICOS Dairy Policy Executive T J Flanagan.

“It is extremely positive that the vast majority of Irish milk producers now have milk supply agreements with their co-ops and this is mirrored, for the most part, with actual producer shareholdings in these organisations,” he said.

“We do not want to end up in the situation now unfolding across the water, where significant numbers of dairy farmers do not have supply agreements with a milk processor or co-op.”

Flanagan pointed out that only a very small number of dairy farmers in Ireland do not have a shareholding in the co-op to which they supply their milk.

“But this issue is now being actively addressed by the respective co-ops,” he said.

“All are now actively offering a share buy-in arrangement to the farmers in question. These can be paid off over an agreed period of time.”

Commenting on the prospects for milk prices, Flanagan said that the market could turn around extremely quickly.

“This is what happened in 2009 and 2012 and I see no reason why this could not be repeated again. Once Chinese buyers believe that the market is about to turn, they may well start to actively re-engage with the world’s dairy supply companies.”

Flanagan believes that the good weather of recent weeks has served to buoy the mood of Irish dairy farmers.

“There is ample evidence to show that cows are performing well at grass,” he said.

“This is in total contrast to the situation that prevailed in both 2009 and 2012.

“Milk quality is excellent at the present time, particularly where protein levels are concerned. As a consequence, producers are receiving prices that are well in excess of base levels.”

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