Irish dairy farmers fortunate that consumers drinking ‘real milk’

While Irish liquid milk producers have been protesting about the possibility of a milk price war, there is still an appreciation of milk as a healthy natural product in this country, Mary Shelman, former director of Harvard Business School’s agri business programme, told AgriLand.

Shelman who is the “absentee owner” of a 475ac farm in Kentucky, which is a cash grain operation divided between corn and soya beans, was in Dublin last week to deliver a number of addresses. She was at UCD’s Michael Smurfit School and also delivering lectures for Bord Bia’s talent programmes, including the Origin Green Ambassador programme.

Currently an advisor to the agri business programme at Harvard, she was engaged by Bord Bia in 2010 to conduct a high-level assessment of the Irish food and drink industry. The objective was to identify new export opportunities. The results were presented in Bord Bia’s ‘Pathways for Growth’ strategy, with key elements incorporated in Food Harvest 2020.

A number of initiatives were introduced by Bord Bia as a result, including Origin Green, the country’s national sustainability programme.

“The supermarket industry is very competitive in Ireland right now, and is looking at ways to get customers in-store, and drive traffic. Irish farmers should be happy that people are drinking real milk. In the US, we have seen the emergence of ‘fake’ milk products such as almond, cocoa and soya milk. Part of that is due to consumers getting caught up in health trends.

“In the US, milk hasn’t been promoted as a health product. In Ireland, the dairy industry is in better shape. There is still an understanding and appreciation of milk as a healthy natural product, and recognisable brands are continuing to tell that story,” she said.

In the US, a more generic approach is taken, and nobody is championing fresh milk, Shelman said. “Irish farmers are in a better position that those in many other countries.”

One of the key factors having an impact on food production – including the dairy sector – currently, she said, is technology. Introducing new technologies that can be used throughout the supply chain in a farm-to-fork approach, and using the data garnered, will help improve farming operations, she said.

Farmers that adopt new technologies and use the information they gain will be in a stronger position to compete.

“Consumers have changed and are now demanding more of their food from farmers and processors. They want to know more about issues such as animal welfare and the treatment of labour. They also expect companies to invest back in their communities, and to provide information on their products. Basically, transparency is expected.”

Bord Bia’s Origin Green programme provides the structure to ensure and prove they are doing the right thing, she said. “Investment in Origin Green provides the framework to facilitate success. It provides industry-level trust and confidence in the food system.”

Shelman said that while there might be a cost associated with involvement in Origin Green in the short term, in the long term the benefits would be significant. “Farmers are always thinking about the next season, and this approach also applies to investment.”

Supermarket price wars are a hot topic, and Shelman said that many people need access to inexpensive safe food. “By concentrating on own label products, sourced directly from producers, Aldi and Lidl have skipped a step in the supply chain, and can offer lower prices. Their adverts prominently feature Irish origin, such as Bord Bia’s Q Mark as a quality selling point for meats and other categories,” she said.

“Last week, Bord Bia launched an Origin Green campaign showcasing Ireland as a country where things are done right, and it is an initiative which could help with the price pressure issue.”

Shelman commended the Irish government for its support of food and drink exports which, she said, helped farmers and producers to sell on value rather than volume.

Shortages of labour have been cited as obstacles to reaching targets in the dairy sector, but Shelman said that technology could replace labour in some situations.

Globally, there are huge opportunities for Irish food suppliers, she said. “Ireland’s volume is small in the global context, but if producers are able to differentiate, that should put the country in a very powerful position. The rising influence of countries like China, which seek security of supply, will continue. Their actions will have a larger impact on the global food industry.”

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