Dale Farm remains committed to sourcing more milk from farmers across Northern Ireland, as part of the co-op’s ongoing commitment to grow its business to meet customer demand.
“We have the capacity to process an extra 30mL to 40mL annually,” confirmed Dale Farm’s chief executive Nick Whelan.
“This will be sourced from existing suppliers and new entrants.”
He added:“The industry is seeing a significant number of new entrants starting milk production and we have seen a large number of these keen to sign up with Dale Farm. We are happy to speak with all new entrants, irrespective of their scale of operation.”
Whelan also confirmed a very strong response from member and suppliers to the co-op’s fixed price contract offer. This guarantees a base price of 27ppl for all contracted volumes over a three year period, beginning on January 1st next.
“The fixed price scheme reflects the commitment of our customers to establish long term supply contracts,” he said.
“I can confirm that very significant volumes of milk have been signed up to the new contract arrangements from the start of the New Year.”
“We accepted, in full, all the applications made by those members seeking to participate in the new supply arrangements. Some of these applications have committed 60% of their milk for the next three years”
The Dale Farm CEO said that the potential for future sales’ growth within the GB market is highly significant.
“Britain is only around 70% self-sufficient in milk and dairy products. We already know from our existing customers in GB that they want to source more dairy products from Northern Ireland.
Commenting on the current state of international dairy markets, Whelan explained that prices have started to soften over recent months.
“This is particularly the case where butter and milk powders are concerned,” he added.
“Milk production has increased in France, Germany and the UK over recent months. Relatively high milk prices across continental Europe will slow down the process of supply meeting demand so we could be looking at a challenging six months.”
Given the evolving market conditions, Whelan admitted that milk prices to farmers are likely to reduce over the coming months.
“The question is whether prices fall gradually during November and December or hold-off to the New Year, at which stage base prices would be more likely to re-aligned with commercial market returns in one fell swoop.”
Looking to the future Whelan said that a combination of new product development and the rolling-out of a ‘Lean’ cost cutting programme will help secure a profitable future for Dale Farm.
“It should be feasible to take £1m in costs out of the business annually over the next five years,” he said.
“This will be achieved by scrutinising every facet of our operations and identifying where savings can be made.
“This is not rocket science: rather it is a painstaking exercise that will deliver real and sustainable benefits for the group and our farmers in the long term.
“Nor are we looking to reduce job numbers within the business. In fact, our plan is to provide attractive training and development opportunities to upskill all those who are currently working for Dale Farm, across the board.”