Tirlán is “very interested” in developing its milk pool but it will not “aggressively” go after farmers who have milk supply agreements (MSAs) with other co-ops to do this, according to its chief executive officer (CEO).
Seán Molloy, who became CEO of the Kilkenny headquartered co-op in August, told Agriland that he believes the dairy sector is “entering a different period” in Ireland – one that is likely to “see a direction of travel more inclined for consolidation within the industry”.
According to the Tirlán CEO it was “great to see” two co-ops, Arrabawn and Tipperary – whose boards confirmed last month that they would merge, “find a way that could allow them to work together”.
“I think you are going to see further consolidation in the years ahead. The hope would be that it can happen in a planned way and and I think the co-operative movement is serving farmers very well.
“From a Tirlán perspective we have a hugely well invested facility, we have significant capability from a research and development perspective, we have processing capability now and capacity that perhaps wasn’t there in the past – so we’re very interested in developing our milk pool.
“However, we want to work in co-operation with our fellow co-ops in the country, we won’t be aggressively going after farmers with MSA’s with other co-ops. I think that’s not a a productive engagement to take part in.
“But I do see into the future co-ops working closely together to make sure that for all of our farmers we make the best utilisation of the assets that are in place,” Molloy said.
Dairy farmers
Looking back on the last 12 months the Tirlán CEO said for the first half it had been “quite a challenging, difficult year for farmers and the mood was low”.
Molloy said the co-op had “responded very deliberately to those challenges” and listened very carefully to its farmers.
“Cognisant of the weather challenge, the economic challenge on farm, we intervened in the early part of the spring – we put in place feed subsidies for our farmers and we put in place support mechanisms, advanced payments for milk and I think that helped greatly.
“The second-half of the year was very different, we had a very progressive milk policy position over the summer months and I think we’ve ended up at the end of the year in a very positive place.
“Profitability has returned to farmers, it needed to because the previous year was very challenged so I think from a very difficult start at the beginning of the year we’ve come out of the year in a very much more positive position for our dairy farmers,” Molloy added.
Milk prices
He is also upbeat in relation to prospective milk prices – although he warns future prices are always difficult to predict because of “the variables that impact it”.
“I would be optimistic for the outlook in the early part of next year in particular, I think we’ll probably end up the year somewhere around the same weighted average milk price as we’ve had this year.
“It’ll be interesting to see what supply results in the higher milk prices – there might be some weaker markets over the the peak period but it’s a little bit early at this stage to be definitive in that regard, so I think I would be quite optimistic as we go into this, certainly for the first period of 2025,” Molloy said.
In a wide ranging interview as part of Agriland’s On the Record Series 3 the Tirlán CEO also warned about the challenges that lie ahead in 2025 for dairy farmers, particularly in relation to the nitrates derogation and why it is crucial that “a young boy or girl today sees a future in farming”.