Current Account noticed that Lakeland's Dan Buckley made his by now annual call for a consolidation in the Irish dairy industry. He has been calling for just such a reduction in the number of processors ever since he took over as chief executive of Lakeland (itself the product of the Killeshandra/Lough Egish merger) in the early 1990s.

But the Lakeland boss is not an advocate of the "big-bang" approach to rationalising the dairy industry where control of milk processing would move into the hands of a few regional dairy giants. Such a move would reduce farmers' influence on the industry and put them in the position of being pricetakers.

Instead, Dan Buckley wants to see some consolidation on a regional basis. The only problem from his point of view is that his neighbours are either too big (Glanbia); not interested (Town of Monaghan); across the Border (Strathroy); or like Golden Vale's Jim Murphy, preferring to diversify into ready meals rather than merge with another dairy processor.

What will drive dairy consolidation is the price that farmers get for their milk. When world markets and milk prices are good, there is no pressure on farmers to merge their own co-op with their neighbour's. And the strong local loyalty to the co-op means that most co-op members are not keen to be seen advocating the loss of independence that a merger would bring.

But the outlook for milk prices is decidedly poor. In the next year or two dairy farmers are likely to suffer substantially, as processors cut their milk prices to match prices for butter and skim-milk powder. Against that background, farmers may have to pay more attention to the cost savings that rationalisation would bring - cost savings that can be passed on to farmers in the form of a higher milk price.

Ireland currently has a couple of dozen dairy co-ops, many of them tiny. The profile of the industry is in stark contrast to competitor countries like New Zealand, Denmark, Holland and the US, where giant dairy processors whose milk output is bigger than Ireland's entire milk quota are being created. That is what the Irish dairy industry is now up against.

But until farmers begin to feel the pinch, local loyalties are likely to outweigh the logic behind rationalisation and the creation of a few giant super-processors. When the farming lobby next complains about dairy-farm incomes, maybe it should do some reflection on its own inability to push for the sort of dairy industry that can give dairy farmers a better income.