Lakeland Dairies has temporarily laid off 140 staff at its processing facility in Killeshandra, Co. Cavan, due to the ongoing consequences of Covid-19 on dairy markets.

The development comes amidst reports that the co-operative’s executive team will also see a reduction in salaries in a bid to lessen the overall impact during this turbulent period for the sector.

Those impacted by the temporary layoffs are believed to work at the Killeshandra plant’s UHT (ultra high-temperature), butter and ice-cream units.

It is understood that a plan has been agreed with employees and will include staff using annual leave, as well as short-time working, and the temporary layoffs.

It is understood that some employees who have been laid off for a four-week period will be kept on the payroll; while others working in ice-cream production may be called back over the coming week.

Meanwhile, in relation to reports that the co-operative’s executive management team has taken a pay cut, a spokesperson for Lakeland Dairies said: “Such matters were private and for the board and management of the society.”

Milk price cut

Last week, Lakeland Dairies announced a 1.81c/L reduction to its milk price for the month of March.

In the Republic of Ireland, a price of 30c/L including VAT and lactose bonus will be paid for milk supplied in March. In Northern Ireland, a base price of 23.75p/L will be paid for March milk – marking a cut of 1.5p/L on its February price.

Commenting on the price, Lakeland Dairies said the fallout from the Covid-19 is having a dramatic impact on dairy markets.

“The food service sector across Europe has suffered near wipe-out following the closure of restaurants, cafes, hotels, while airlines have grounded many planes.

Food service is an important route to market for Lakeland Dairies and many dairy processors across Europe.

“Prices for butters, powders and cheeses are under significant downward pressure as food service milk is now flooding into powders and butter,” a statement outlined.

While on the domestic front, sales of fresh milk and butter in retail outlets have increased somewhat, the co-op stated that this increase has not offset the drop-off in sales in the food service market.

“Reports from the UK and the US where farmers have been forced to dump milk as a result of a fall-off in demand, mainly in the food-service sector, has had a serious negative impact on the market.

“The markets are difficult at present and Lakeland Dairies will continue to monitor developments closely in the coming days and weeks,” the statement concluded.