Aurivo looks to be “in good stead” for processing capacity looking forward, according to Aurivo, with its third dryer in the process of getting up and running currently.
Due to go on milk last Monday, April 15, the new machine produced its first powder before lunchtime on the day, according to co-op CEO Aaron Forde.
The CEO was speaking to AgriLand following the release of Aurivo’s financial results for 2018 yesterday, April 17.
“With dryer three getting up and running we’ll be in good stead for the period ahead. Nonetheless, there’s a period of finishing out that commissioning and we’re anxious that that goes well for us.
At that point, yes, capacity isn’t an issue for us.
Turning to the topic of collaboration possibilities with other entities going forward, Forde said: “The first thing I’d say is we’ve always been very open to growth and gain and efficiency in whatever shape and form it comes.
“We’ve acquired the Donegal business in 2012; that was good for the farmers associated with it and good for Aurivo.
“We try and maintain a healthy dialogue with anybody who we would see synergies in collaborating with, whether that’s merger or in other forms, whether it’s transport or co-processing or whatever.
So I would say [we’re] very open to all of those arrangements.
Commenting on the volatile nature of butter in recent times, Forde noted that butter was traditionally a €2,500-€3,500/t product.
18 months ago it was touching off €7,000/t, leading to a lot of excitement in the sector.
“Ultimately, Mrs. Housewife never really ended up paying that equivalent in a tub or in a foil pack in any market and you’d say at that level then that probably isn’t sustainable.
“We’re back now to call it €4,000/t which is still a very strong price historically for butter.
That isn’t today being recovered in the marketplace; certainly not here in Ireland and I suppose, from a sustainability point of view, the make-up of an Irish milk price – and indeed a global milk price – has rebalanced more in favour of protein, which for the long term is a more sustainable position to be in.
“Where butter settles out, stock has built a little bit; the butter market is cooler and it’s bobbing around at €4,000/t – but playing its part in a more sustainable makeup of the milk price.”
Turning to the topic of Brexit, the CEO noted that, from an export perspective, a dramatic impact is not expected.
“We don’t sell actually anything into the UK; we obviously have significant sales of our ‘For Goodness’ brand in the UK but that’s contained in the UK – it’s manufactured there and sold there by and large.”
However, the UK’s departure does pose other challenges for the cooperative.
“Our main impact from a Brexit point of view is our Northern Irish milk pool, which today all comes south for processing. It makes up about 16% of our milk pool.
We’re confident that we have a process that will work where we can continue to bring the milk south, process it and re-export it.
“But it will add more bureaucracy, it will add more administration, it will add more cost and it’s not welcome in that respect.
“So, our wish and our hope for Brexit is we end up as close as possible to the situation we have now in terms of trading,” Forde concluded.