The chief executive of Carbery Group, Jason Hawkins, has said that dairy markets are expected to remain stable in the short term.

However, he warned that there is a risk the current global economic landscape could impact on demand for dairy produce.

Speaking with Agriland during the open week event at the €80 million Carbery cheese plant in Co. Cork, Hawkins said that the “steep increase” in dairy prices is positive given the rising input costs faced by both farmers and processors.

Jason Hawkins, Carbery Group chief executive. Image: Carbery

“We’ve all been very welcoming of where the market has come from and where it is today. We’d all agree it probably feels like it is at the top end of where you’d expect the market to be.

“Obviously, there are concerns around demand burn off, particularly in this potentially recessionary environment.

“Supply seems quite muted both in Ireland and around the world, it’s hard to see maybe where that changes. So, it’s really going to be a demand question,” he continued.

“It looks quite stable right now in the near term, so that’s a good place to be. I think once you get out beyond four to six months it’s obviously much more difficult to call those markets.

“Hopefully, if we see a correction, it’s in a more modest way and more manageable way as opposed to maybe some of the cliff falls that we’ve seen in the past around pricing.

“I think in the near term we feel pretty comfortable with the stability in the market and stability in pricing,” the Carbery chief executive said.

Energy

Similar to other businesses energy costs have posed a major challenge for Carbery.

“It has been a significant cost. Our energy costs here, particularly around gas, has increased six or seven-fold over the two years from where we’d normally be. It has certainly been a significant challenge for us.

“The team have done a great job again being able to mitigate some of that, having other alternatives available to us. But like everybody else, we’re at the same end of the market dynamics out there, we just have to manage that,” Hawkins said.

“It’s a very very volatile market at the moment but thankfully we’re managing our way through both in terms of the security of supply and then trying to manage the costs,” he added.

The main energy source at the processor’s expanded facility in Ballineen is an on-site combined heat and power (CHP) plant which produces 80% of the plant’s electrical requirements. The remainder of the electricity is sourced from the national grid.

Sustainability

Hawkins said that Carbery has been “very focused” on all aspects of sustainability.

He added that farmers understand that they have an important role to play in sustainability and want to be part of it.

“We’re very conscious about having the label of ‘green washing’ in any way, shape or form associated with Irish dairy or our own business.

“That’s from farm to fork in terms of both our credentials here on site and the work we have done through improving our energy efficiency. We use the same amount of water that we did a number of years ago,” he said.

In August, Carbery, in partnership with Bandon, Barryroe, Drinagh and Lisavaird co-ops, launched the €6 million FutureProof sustainability bonus scheme for milk suppliers.

Work is also ongoing on the Farm Zero C project, which aims to create a “world-first climate neutral dairy farm”.