Dairygold calls for ‘leadership’ in dealing with EU Commission

THE chairman of Dairygold has called for ‘strong leadership’ from Government to safeguard the future of dairy farmers.

Sean O’Brien was speaking following the publication of the co-op’s results for 2023, which saw turnover and profits slide after a year of challenges.

In 2023, Dairygold turnover fell €254.7m to €1.4bn, while operating profits fell €16.3m to €23.9m.

He said uncertainty surrounding the future of Ireland’s nitrates derogation remains ‘the significant challenge for the dairy industry’.

‘The removal of the derogation would significantly curtail milk production, impacting the viability of the entire industry. Strong leadership, including in-person engagement with EU Commission personnel, is needed now, to address industry uncertainty and allow farmers to plan for the future,’ he said.

‘For its part, Dairygold will continue to engage at member level to understand their position and at political level to seek clarity and certainty on this critical issue.’

During the year, Dairygold processed 1.41 billion litres of milk, a 4.7% decrease (70 million litres) year-on-year.

At farm level, milk production was challenging with a significant decline in milk price of around 30% and input costs remaining relatively high.

‘In addition, adverse weather and sustainability concerns impacted milk production volumes. The level of future milk volumes will largely depend on how the sustainability challenges are addressed by the dairy industry and this is a critical focus for the society,’ Dairygold reported.

Chief executive Conor Galvin left Dairygold in February to take up a role as the chief executive of Ornua. Michael Harte has taken the reins as interim chief executive. Mr Harte said 2023 was a difficult year for the dairy and tillage sectors, as market returns declined significantly from the unprecedented highs of 2022.

‘Unfavourable weather conditions, combined with continued high input and processing costs, created a perfect storm for farmers and processors alike. As a farmer owned co-operative, Dairygold responded by paying strong milk and grain prices to suppliers. Overall, the society delivered a satisfactory financial performance in 2023, with all businesses delivering to expectations,’ he said.

Mr Harte said the co-op continues to face ‘head on’ the challenge of becoming more sustainable. ‘Over 90% of Dairygold’s milk supply is participating in our new Grassroots Milk Supplier Sustainability Bonus programme, which is a significant achievement. In addition, we are implementing a detailed decarbonisation plan across our factory operations, to deliver a 42% reduction in carbon
emissions.’

As part of its sustainability focus Dairygold’s Grassroots Milk Supplier Sustainability Bonus Programme has seen participation grow rapidly with more than 90% of Dairygold Milk Supply signed up to the programme.

In March 2024, Dairygold became the first dairy processor in Ireland to enter into a Corporate Power Purchase Agreement (CPPA) with a farmer member, having signed an agreement with Michael and Rose Quirk of Lurrig Solar Farm, to purchase 5,000 MWh of solar energy from the farm to power Dairygold’s processing operations.

Dairygold also became the first dairy processor to add an electric milk truck to its fleet, another step forward on the decarbonisation journey.

Dairygold Agri Business faced a number of challenges in 2023, with the sale of feed and fertiliser being negatively impacted by reduced on-farm margins and sustainability concerns, though retail sales were generally in line with 2022.

\Despite the difficult weather conditions Dairygold grain growers delivered over 106,000 tonnes of quality grain and beans to the co-op.