87% of Kerry Co-op milk suppliers say controlling future milk processing and value-added operations is somewhat or very important.
That is according to the findings of a survey carried out by Ifac on behalf of the board of Kerry Co-op.
1,563 out of 2,840 suppliers responded to the survey, which was conducted between November 29 and December 23, 2023, giving a response rate of 55%.
Based on a cow producing 5,400 litres and a total cow population of 134,513 cows, the respondents are delivering 726 million litres of milk (60.5%) out of a total milk supply of 1.2 billion litres.
The survey shows that younger suppliers feel more strongly that control is somewhat or very important than older suppliers.
There was no significant variation seen in overall sentiment between counties where suppliers are based.
Suppliers
The survey also reports a projected growth in average herd size among Kerry Co-op suppliers from 87 to 96 cows over the coming five years.
This increase is forecast despite an anticipated 3.5% reduction in total cow numbers.
Suppliers who are growing their business tend to be younger with a larger herd size and an increased ambition for control of milk processing and added value operations
Those exiting tend to be older (86% over the age of 55) and farmers with smaller herds. 60% of those who plan to exit have a herd size of less than 50 cows.
Succession emerged as an important issue as 35% of farmers above the age of 55 did not have a definite successor identified.
The survey also asked respondents about the challenges which could limit milk production over the next five years.
73% of farmers believe that environmental regulation and land issues as the main barriers to growth.
Over 70% of suppliers have leased land as part of their farm with 16% having land on short-term lease (less than 12 months) on their milking platform.
Only 10% expecting land to become available to lease or buy in the next 3 years.
Nearly half of the farmers who took part in the survey are currently availing of the nitrates derogation.
A significant portion of the milk suppliers plan to invest in slurry storage solar panels and grazing infrastructure to meet regulation requirements or enhance farm efficiencies.
Almost 90% of the farmers are milk recording, undertaking regular soil sampling and using low emission slurry spreading (LESS).
58% of suppliers said they had been negatively impacted by the portrayal of agriculture by media, including social media, pointing to the need for communication strategies to counteract this.
Kerry Co-op
Chair of Kerry Co-op, James Tangney thanked suppliers for taking part in the survey which he said is very important in helping the co-op to make informed decisions.
“This is part of our strategic planning process that is ongoing in relation to our current milk supply contracts in their current format with Kerry Group PLC which are coming to an end in 2026,” he said.
Tangney said that progress has been made in the co-op’s strategic review and the work done in 2023 “has brought focus to the board’s thinking”. He added that proposals will be brought to co-op members in due course.
The board appointed former Dairygold chief executive, Jim Woulfe as “an independent external advisor” last year.
In April 2021, talks between Kerry Co-op and Kerry Group on a potential dairy business deal were suspended after over 18 months of discussions.
The co-op is the largest shareholder in Kerry Group with an 11.4% stake in the company worth around €2 billion.