Lakeland to re-open its share register

Lakeland Dairies will shortly re-open its share register after being closed for the past three years, according to the co-op’s Chief Executive Michael Hanley.

“This follows a decision taken by the board some time ago,” he said.

“It is the intention of the co-op to provide all its dairy farm suppliers with the option of becoming shareholders. Their shareholding will be based on the volumes of milk they supply.”

Hanley said that the shareholding option will be offered to suppliers throughout the island of Ireland.

Lakeland Dairies recently reported a 15% increase in revenues to €625.8m for 2014, yielding an operating profit of €12.9m: up by 10% on the previous year.

While acknowledging the current decline in dairy markets, Hanley is not advising Lakeland suppliers to cut back on milk output.

“The very opposite is the case,” he said.

“We are totally committed to expanding our milk pool. Lakeland has a market for every drop of milk it processes at the present time. And I am totally confident of this remaining the case as our output levels increase.

“But the reality is that we are selling product onto an international market that is considerably weaker than was the case a number of months ago.

“Supply and demand are the key factors that now determine international milk prices. This is why the Fonterra auction is so important: it acts to reflect the sentiment that is permeating international dairy markets ay any particular time.

“It may well be six months before farmgate returns start to strengthen. This is because milk production continues to increase significantly in Europe, New Zealand and the US.”

Hanley confirmed that international sales of dairy products continue to increase.

“But global milk output is simply out stripping the requirements of the market at the present time,” he said.

“We saw an upturn in prices paid at Fonterra’s global dairy trade auction during the early weeks of 2015. This reflected the belief that drought could have a downward impact on New Zealand milk output at that time. However, this failed to materialise.”

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