95% of Kinisla milk suppliers have signed the new milk supply and purchase agreement, according to the chair of the dairy business.

James Tangney told Agriland that no decision has yet been made by the Kinisla board in relation to suppliers who have not signed the contract, adding it is “business as usual”.

"If you haven't the contract signed today, your milk is being collected. That will be a board decision down the road.

"But obviously we are delighted with the amount of people who have signed contracts, up on 95% of our suppliers have signed the contract.

"With that kind of a take-up on our contract, we're delighted that our milk suppliers have put the trust in Kinisla to sign up to the contract and they're happy with it.

"So the 5% of the people who are left, obviously it will be looked at and all we've done presently is written to them advising to sign the contract," he said.

Tangney said that signed contracts are continuing to come into Kinisla, with more arriving last week.

Contracts

In April, Kinisla presented a new contract to its milk suppliers, replacing the previous contract, which expired on April 30.

Suppliers were given until August 4 to sign the new agreement.

In August, Kinisla sent letters to suppliers who have not yet returned their signed agreement, reminding them to do so as soon as possible.

The letter reiterated that Kerry Creameries Limited (KCL), the wholly owned subsidiary of Kinisla that purchases milk from farmers, has no obligation to continue buying milk from suppliers who did not sign and return the contract by August 4.

It added that milk will continue to be collected and purchased from these suppliers for "a further limited period" to facilitate the signing and return of the agreement.

Kinisla

When asked if some milk suppliers could leave Kinisla over the new contract, Tangney said that is "an individual decision for each supplier".

"Nobody is being forced whatsoever to sign the contract and if suppliers feel that they're getting a better deal elsewhere, if they're getting better terms elsewhere then obviously it's up to each individual supplier.

"They can go where they choose with their milk obviously," he said.

The Kinisla chair maintained that the new contract is "very fair" and similar to those issued by other dairy processors.

"If people want to leave Kinisla, I would hope they will stay with us.

"I've given a commitment publicly myself that Kinisla will pay one of the top [milk] prices in the country going forward. Our business is strong.

"Our business had €81.3 million EBITDA (earnings before interest, tax, depreciation and amortisation) in 2025 and also we did pay the second [milk] highest price in Ireland last year and achieved that EBITDA and that's something that's very important," he said.

Tangney said this was based on a leading milk price calculation carried out by Kerry Co-op.

When asked to comment on speculation that preferential shares may be considered for those who have signed the new contract, Tangney said: "Nothing has come before the board whatsoever in relation to preferential shares or anything like that."

Drought

Tangney said the recent drought had a "severe impact" on some farmers in the Kinisla catchment.

He appealed to any farmers who are in difficult with fodder supplies to contact Kinisla as soon as possible.

"Kinisla have made the commitment and I'm making the commitment too that we will see no one short and that Kinisla will, as KDI (Kerry Dairy Ireland) has done in the past, will help our suppliers," he said.

The processor is currently looking at sourcing fodder from the north and west of the country.

Farmers with silage to sell are also being encouraged to advertise in their local area.

The Kinisla chair said the cost of transporting fodder is a "big issue" and he appealed to the government to bring forward a fodder transport subsidy scheme.

Kinisla has also decided to extend a discount available on selected dairy feeds of €50/t "until further notice".