Global dairy markets are currently showing positive signals in terms of prices, according the interim chief executive of Ornua.
Donal Buggy said that prices have stabilised in the third quarter (Q3) and in the last few weeks there has been “some signs of life on pricing across the world”.
“I think more importantly we need to see a bit of stability in that price. It doesn’t suit anyone for the price to be rocketing up and rocketing back down again, it just isn’t the way, particularly a brand, you need it fairly consistent.
“So a nice steady growth in the price without any major fluctuations I think will be of benefit for everyone.
“At the moment, signs are looking positive on that front, we can’t predict, but at the moment what we’re seeing is good,” he told Agriland.
Buggy made the comments as a €40 million investment in Ornua’s flagship butter production facility at Kerrygold Park in Mitchelstown, Co. Cork was officially launched yesterday (Wednesday, October 25).
“We’ve doubled the size of this plant here in Kerrygold Park. To put that in perspective, we currently produce 40,000t roughly of butter and that will allow us to produce up to 80,000t, which is one million packets of butter a day.
“If we get to that point with full factory, we’ll all be very happy people.
Ornua said that the strategic development of Kerrygold Park will support the next phase of growth for Kerrygold on its journey to become Ireland’s first €2 billion food brand.
“When we opened the factory first back in 2016, we expected it to last 10 to 15 years before it was full. We’re already back doubling the size today because it is full as it stands.
“[We’re] very close to the €2 billion euro figure on the [Kerrygold] brand. Hopefully, in the next short we will be able to announce good news on that.
“It’s not that long since we were €1 billion, so it’s been a rapid growth over the last five or six years, which is great to see,” Buggy said.
Ornua
The butter production facility at Kerrygold Park now includes two state-of-the-art butter churns and 10 packing lines for a range of over 50 different product formats.
As a result of the investment, which was supported by funding from Enterprise Ireland, 30 new jobs were created bringing the total workforce at the facility to 180.
“We’re expanding the plant, but it’s with existing butter produced in Ireland. We’re not looking for any more butter to be produced in Ireland. We can fill this plant with what’s there already.
“So it isn’t about having extra growth in the production of dairy, it’s about actually adding value to the dairy products we already have.
“We can put more milk and cream through the butter through the Kerrygold brand we can drive more value for ultimately for our farmers and our member co-ops,” the interim Ornua chief executive said.
The investment in the plant will allow Ornua to produce a variety of products in different sizes, including a new 100g butter stick.
“If you’re not catering for what the consumer wants, you’re not going to get them to pay the price,” Buggy said.
The interim Ornua chief executive also noted that 2023 has been “a very hard environment” for farmers both in terms of milk price and difficult weather conditions.
“Farmers do understand sustainability, they want to achieve the highest sustainability they possibly can.
“They are looking for guidance. They are looking for support, be it research or finance. It’s incumbent on all of us in the industry to make sure there are supported.
“They want to get there. We need to help them get there too,” he said.
Dairy exit scheme
Buggy was reluctant to be drawn on his thoughts about a potential voluntary dairy exit scheme.
“[It’s] not something that we as Ornua get involved in, we’re obviously owned by member co-ops who then deal with the farmers, so I’ll leave that to the experts, but we all want to get to a sustainable future and we all want to be financially viable in the future as well,” he said.
Minister for Agriculture, Food and the Marine Charlie McConalogue told Agriland yesterday that the government is continuing to consider the measure suggested in the final report of the Food Vision Dairy Group.
The minister added that regardless of what decision is made he wants to see food production and farm incomes increase.