IRELAND’S DAIRY co-operative boards and leaders must no longer dodge the necessity to restructure the industry to ensure its survival, Irish Farmers Association president Pádraig Walshe has said.
He told a meeting of the Dairy Industry Forum in Fermoy, Co Cork, at which the entire dairy processing industry was represented, that they must bring in changes very quickly.
He urged them to initiate a programme of restructuring and cost-cutting to ensure the processing resources were best utilised.
He said future production plans were focused on maximising market returns to farmers.
Currently Irish dairy farmers are producing milk at below cost as falling global demand and over-production in the US has forced down the prices they are paid to 20c a litre. This, he said, was 7 cent below break-even levels.
“There is a great deal of room to optimise the use of existing processing plants to reduce costs and to ensure a product mix which improves returns to producers.”
He added: “Crucial decisions must be made now by the dairy processing sector, and implemented within the next 12 months.”
Mr Walshe said major EU competitors like Friesland Campina would achieve savings and marketing gains of € 175 million from their restructuring of the last two years.
He claimed this was the equivalent of €11,000 for each of its 16,000 supplier shareholders in the Netherlands, Germany and Belgium.
“Arla in Denmark and Sweden have in recent months acknowledged that their suppliers could not afford further price cuts, and have implemented a €135 million cost-cutting plan.
“These are the kinds of strategies the Irish dairy industry needs to adopt to be in with a chance to compete and to secure long-term viable milk prices for farmers,” said Mr Walshe, who was recently elected head of COPA, the European farmers’ organisation.
Farmers and processors called on the Government to seek more EU market supports from the European Commission.
They also want the Government to provide export credit insurance and reduce the excessive cost of doing business in Ireland.