Kerrygold owner continuing to ship product to the US 'as normal' - Ornua CEO
The Kerrygold brand has been a "victim of its own success" in the US as demand for the product continues to "consume" stock supplies in the market, according to Conor Galvin, the chief executive of Ornua, which owns the brand.
Ornua today (Wednesday, April 16) published its 2024 annual report in which it highlighted that Kerrygold ended 2024 as the number two block butter brand in the US and the "fastest-growing brand in the category".
Galvin told Agriland that against the backdrop of the ongoing concerns about the impact of US tariffs on Irish businesses Ornua is in a "position of strength and stability".
"From an Ornua point of view, the US is an important market for us and I think we would all acknowledge the growth that we've seen in the US over the last number of years.
"But we have a number of other markets both on the ingredients side of business and in the food side of the business of which Kerrygold is a significant part.
"If we look to our ingredients business, Europe and North America are equally important and, on the Kerrygold side, Germany for generations has been important and the UK is growing, we're now the number two block butter brand, so there is a balance to the business when we look at what's happening in the US," Galvin added.
According to the Ornua CEO, the immediate key challenge for the owner of the Kerrygold brand is the "uncertainty" in global markets because of the ongoing debate over what US President Donald Trump plans to do once the 90 days pause on his proposed tariffs expires.
A baseline tariff of 10% has been in place on all goods entering the US since April 5.
Galvin said that because of the the production profile of of milk everything Ornua had available for the US had been moved before the end of the calendar year.
"We're somewhat a victim of our own success in that our sales rate in the US has consumed a lot of that product already. The new season has started, spring calving is finished now, Kerrygold Park (the home of Kerrygold butter production) is at full capacity producing the 2025 make and that's going to the US.
"We're placing it into the US - we had say a normal level of stock in the US because of the sales rate being so strong before the 10% landed and we'll just continue to move product in to the US as normal.
"We'll ensure that we have adequate stocks over there, but we can only ship it as it's made," he added.
Ornua has welcomed the negotiations that are ongoing between the European Union and the US in relation to trying to reach a "negotiated settlement" on tariffs.
Galvin said a settlement would "bring certainty back into the system".
"We also need to recognise that there are tariffs being placed on large blocs like China that will disrupt dairy ingredient flows, because for example it would make less sense to export dairy product from the US to China if there's a 145% of a tariff on it.
"Equally it will make less sense for a product to flow in the other direction, so that is going to disrupt global trade and as we know the commodity prices are very sensitive to any changes in the market and it is something we need to keep an eye on," the Ornua CEO added.
