Dairygold, the troubled Munster dairy company which has shed over 500 jobs in its ongoing rationalisation programme, will base all future dairy manufacturing decisions wholly on potential market demand for specific dairy products, moving away from commodity products.

Dairygold chief executive Mr Jerry Henchy said that up until now the company's strategies were largely based on commodities which attracted the greatest EU supports and protections.

However, changes to the Common Agricultural Policy and at World Trade Organisation level meant that such strategies were no longer tenable, as the industry has begun to emerge from a long period of market regulation.

"In consequence, Dairygold's strategy going forward will, over time, see it move away from commodity products insofar as it is possible and into value-added products for which there is clearly identified consumer and market demand," he said.

"This will represent a significant change, over time, to our current operations model in which our first concern has been to process milk and then to seek markets," he said.

"Going forward, Dairygold will first determine the most suitable product mix that will utilise the co-op's 190 million-gallon milk pool, and provide the greatest return.

To derive the maximum value which can be achieved from our milk pool, Dairygold will require significant change over time to its processing and product mix," he said.

He said natural cheeses, both mainstream and speciality/niche cheeses, would take the lead position in Dairygold's future product mix.

However, he said, the process would not be some sort of a "big bang" with major or instantaneous changes. It will be a slow evolution over the next five years, he told a meeting of the Guild of Agricultural Journalists.