‘Water quality focus central to avoiding dairy expansion issues’

A focus on water quality will be central to avoiding dairy expansion issues experienced in the likes of New Zealand and Holland, according to the CEO of Arrabawn Co-op, Conor Ryan.

Suppliers were told at the co-op’s Annual General Meeting (AGM) that sustainability and the environment must be prioritised going forward.

Commenting on the matter, Ryan said: “We are going to be hearing a lot about sustainability and the environment going forward and within this area, water quality is going to be a major focus.

If we are to avoid the situation that Holland finds itself in today – where they have to reduce their cow numbers by 160,000 cows – we are going to have to be very proactive and responsible for water quality issues.

As it stands, Arrabawn is currently training up staff to help farmers with water quality testing and other related matters, he added.

“It’s about being aware of our responsibilities. It’s not just Holland; but New Zealand – the world’s largest milk producing nation – has had some difficulties in this area also and they are paying the price for that today.

My advice is that the day of not prioritising the environment is over. You must respect it and avoid a situation where it comes back to bite you.

“We’re in the midst of significant milk expansion on this island and we need to do it in a very sustainable way,” he said.

‘Solid year’

Meanwhile, Ryan indicated that 2017 was a solid year with regards to Arrabawn’s performance.

Also Read: Arrabawn suppliers received an additional €37 million in 2017

He outlined that the ingredients business had a really good year, particularly with an “exceptional return on the price of butter”.

“We also saw better efficiencies delivered at the plant arising from an ongoing investment programme and that is helping deliver better returns.

“Liquid milk market was competitive in 2017, primarily due to the fact of unforeseen raw milk price increases. The agri-business division had an exceptional year with high volumes and good trade in our agri-stores,” the Arrabawn CEO said.

Investment programme

As well as this, the past 12 months represented another year for Arrabawn on the investment side, he added.

Most of its planned investments are completed, or are nearing completion, at its liquid milk plant in Kilconnell, Co. Galway – including a new warehouse and car park. Its effluent plant has also been future proofed.

The co-op’s production facility in Nenagh, Co. Tipperary, got the bulk of the investment, including a €3 million upgrade to the effluent plant, work on the evaporator, as well as increased capacity on both driers – which also deliver extra capacity for future growth.

Concluding, he said: “Our reason for expansion is not to do so just for the sake of it, but to add more value to the business and get better returns for our farmers.

“In the long term, we should build a plant that is capable of processing all the milk comfortably and returning the best price.”

When it comes to milk price, Ryan said that – while 37.5c/L was the average last year – suppliers are likely to see an average price in the low to mid 30s this year.