A scheme offered by Tirlán to farmers who voluntarily retired from milk production cost the co-op in the region of €4.7 million last year, according to its latest set of financial results.
The Kilkenny-headquartered co-op, which has 11,083 members, detailed in the annual accounts financial review the exceptional costs which related to its Milk Supply Voluntary Retirement Scheme.
It stated: “Exceptional costs in 2022 of €4.7 million (before tax), primarily as a result of costs incurred from a Milk Supply Voluntary Retirement Scheme offered to farmers who exited from milk production as part of peak supply management restrictions finalised in early 2022.”
The latest set of results show the value of the Tirlán co-op now stands at €1.2 billion while its closing net debt for 2022 was €233.6 million – which represents an increase of €27.4 million.
The co-op said the increase was “driven” by the additional investment required in working capital due to the inflationary environment and capital expenditure to sustain its core operations.
The results compare the exceptional costs in 2022 with an “exceptional items gain of €1.9 million” based on a number of factors in 2021.
According to Tirlán, its average farmer age is in keeping with national trends.
The last Census of Agriculture conducted by the Central Statistics Office (CSO) showed that the average age of the farm holder in 2020 was 57.
New entrants
Tirlán has indicated that it is expecting 73 new entrants to join its existing 4,327 member dairy farmers this year, following on from 54 new entrants last year.
It does not expect the average herd size of these new entrants to be more than 75.
Recently, new entrants to milk production (covering the years 2021, 2022 and 2023) were offered the opportunity to acquire 2,000 co-op shares at the rate of €5/share.
According to Tirlán, it had 36 exits from milk production outside of the retirement scheme.
Once dairy farmers join the co-op they also sign up to the third-party Sustainable Dairy Assurance Scheme (SDAS), operated by Bord Bia.
Under the terms of the SDAS scheme, dairy farmers must be able to “demonstrate that milk produced on certified farms meets the highest Bord Bia standards”. This includes animal welfare, traceability, environmental protection, and food safety.
The terms of the Irish Co-operative Organisation Society (ICOS) Calf Welfare Charter also underpin Tirlán’s mik purchasing policies.
Carbon
Dr. Lisa Koep, Tirlán’s chief environmental and social governance (ESG) officer, set out in the 2022 annual report that the co-op wants to “support [its] dairy farmers to deliver a 30% reduction in carbon intensity from milk production by 2030”.
It has also set a target of becoming net zero carbon by “no later than 2050”.
Dr. Koep outlined in the 2022 annual report that the majority of its carbon footprint can be “attributed to our Scope 3 (on-farm) emissions from the dairy enterprise”.
“Our dairy is produced from a pasture-based system in Ireland, which is recognised as having one of the lowest carbon footprints internationally.
“However, we recognise the need to reduce our Scope 3 carbon footprint and we have been intensively working with our farmers and farm advisors to optimise the carbon emissions of our milk and grain,” she said.
According to the co-op, the average carbon footprint for Tirlán milk suppliers last year was 0.91kg carbon dioxide (CO2) equivalent per kg of milk, which represents a 7% reduction since 2018.
“This reduction has been achieved by embracing proven management techniques demonstrated through our future farms programme, continuing regenerative agriculture practices and the incorporation of new technologies such as the use of protected urea, low emission slurry spreading and nutrient management planning,” Dr. Koep said.