THE LEADERS of the Irish dairy processing industry have undertaken to continue meeting under the aegis of the Irish co-operative movement to try to resolve the challenges facing the sector.
Icos – the Irish Co-operative Organisation Society – has been attempting to have the organisations work better together in sharing processing facilities, milk collection systems and to cut out duplication in the system.
At their last meeting, the chairmen and chief executives of all the milk processors in the State agreed to continue their discussions on closer co-operation.
The industry is focused on how to cope with an expected increase in milk output from farms when the EU ends its milk quota system in 2015.
The quota system limits the volume of milk a farmer is allowed to produce, and when it ends Irish farmers are best placed in Europe to expand to meet the expected surge in demand for dairy products globally.
However Irish creameries are now running at near full operating capacity during the peak spring/ summer season but at off-peak times operate at only 60 per cent of the national capacity.
“The dairy processing industry is currently undercapitalised, and over the past two seasons, loss-making. This undermines the industry’s ability to fund any necessary expansion from margin,” said John Tyrrell, director general of Icos.
He said new systems to replace the milk quota would also affect the shareholding rights of co-operatives, and new systems would have to be found to accommodate a new era. Because of the static milk volume under the quota system, shareholding policies had not needed to provide for increased production.