Lakeland Dairies has announced that it is withdrawing its peak milk management scheme for new milk.
It a statement, Lakeland confirmed that following on from a comprehensive review of current and updated forecast milk supplies, existing processing capacity and increased investment, as well as evolving legislation, the cooperative has decided to withdraw the proposed Peak Milk Supply Management Scheme for New Milk.
It had been due to start next year for the 2023 milk production season and onwards but Lakeland has decided to withdraw the implementation of the scheme indefinitely.
Peak milk decision
Environmental legislation and continually evolving guidance related to greenhouse gas (GHG) emissions, water quality, fertiliser use and biodiversity have gathered pace since the peak milk management scheme was announced earlier this year, Lakeland outlined in a statement.
The co-op explained that includes changes to the nitrates derogation, with new banding rules designed to reduce emissions based on historic milk yields, and which will affect stocking rates on farms and the rate of growth in milk production from January 1, 2023.
Group CEO Michael Hanley said: “Lakeland Dairies has closely monitored and taken stock of all such developments throughout the past year and believes it is appropriate to withdraw the implementation of the peak milk scheme indefinitely.
“It is also the case that, with continuing developments and ongoing investments and enhancements in extra capacity taking place across all our facilities, higher than anticipated levels of milk processing were achieved in 2022 and further capacity will come on stream in 2023 and beyond.
“Taking these new circumstances into account, Lakeland believes it is in the interests of its milk suppliers to withdraw the scheme. All existing milk procurement arrangements will therefore remain unchanged and will continue as they are now and into 2023 and onwards,” he added.
Lakeland Dairies also confirmed that it will continue to welcome new entrants to dairying on a continuing basis, in the south and Northern Ireland.
“While a large proportion of Lakeland Dairies’ milk suppliers had indicated in our milk survey that they intended to supply additional milk to the cooperative in the years ahead, it is apparent that the likely pace of this growth has moderated and that a continuing balance of processing capacity and milk supply can be maintained in line with sustainability requirements for the years ahead,” Hanley continued.
“Over the past decade, the volume of milk supplied to Lakeland Dairies for processing has more than doubled to a current level of over two billion litres annually.
“In that time, the cooperative invested over €200 million in new processing capacity to cater for milk supply growth, achieving economies of scale and ensuring the processing of all milk.”
The CEO explained that the co-op will be in a position to invest in further capacity if necessary in the future, and this will be kept under review as part of an appropriate and continuing response to the milk processing requirements of its suppliers.
“This decision continues to support the principles of sustainable production including the potential for growth, while providing an appropriate level of balance between milk supply, processing capacity and flexibility in meeting market needs,” Hanley concluded.