Gradual improvement in dairy market conditions likely in 2016 - Lakeland CEO

Michael Hanley, Chief Executive, Lakeland Dairies
Michael Hanley, Chief Executive, Lakeland Dairies

Lakeland Dairies anticipates a gradual improvement in dairy market conditions in 2016 once global stocks begin to clear, CEO Michael Hanley said in his Christmas and New Year message to milk producers.

“Lakeland Dairies has continued to put in the groundwork required to ensure long term sustainability and continuing growth and development in an increasingly globalised and often volatile dairy marketplace. This includes investments in new milk processing capacity, larger scale and an efficiency and cost reduction programme across all operations,” said Mr Hanley.

“Dairy markets have been challenging due to several factors coming into play at the same time. This has included the abolition of the EU quota system and increased production by European farmers, the Russian ban on EU dairy products and a global oversupply from dairy producing countries.

“The major dairy importers and traders across every continent have taken advantage of lower prices to increase their stock of dairy products over the past year and this will take some time to wash through the system. Overall we anticipate that there will be a gradual improvement in market conditions once global stocks begin to clear.

“During the year we acquired Taste Trends in the UK, started our investment in Bailieboro Dryer Number Three and opened our new Global Logistics Centre in Newtownards. We were very happy to welcome hundreds of our milk producers and their families to the open days held in Newtownards which is a technologically advanced facility.

“In spite of the current market volatility, we are making strong progress overall,” the CEO added.

“We have 170 different products and these go to 77 countries worldwide. Our foodservice division makes over 100,000 tonnes of dairy products and 700 million individual product units each year. In the Food Ingredients sector, we supply hundreds of major food industry customers with ingredients and the world’s top infant nutrition companies with the highest quality milk powders.

“Recently, we also announced two strategic joint ventures with Fane Valley Co-operative across our respective dairy processing and agribusiness operations. This is an excellent development between two friendly and neighbouring co-operative societies.

“Lakeland Dairies will be the second largest dairy processing co-operative on the island of Ireland in 2016, with a milk pool of over 1.1 Billion litres. That will further enhance efficiencies across our entire processing footprint. Indicatively, that level of milk throughput will yield 160,000 tonnes of powders a year and over 30,000 tonnes of butter, in addition to our dairy foodservice output,” said Mr Hanley.

“All of these developments have been achieved from existing resources off the back of a strongly performing and well managed business. There have been no share-ups, levies or funding demands placed on our milk producers. As a farmer owned co-operative, we are intent on delivering value to our milk producers with as high a milk price that we can possibly pay, in line with market conditions. That will always continue to be our commitment.

“Notwithstanding the challenges of the past year, Lakeland Dairies is strategically and positively positioned to support our milk producers on a long term and sustainable basis into the future,” Hanley concluded.