Dairy Processing Consolidation on Horizon, but Not Immediate
Source: The DairyNews
The CEO of Lakeland Dairies, Colin Kelly, foresees inevitable consolidation in Ireland's dairy processing sector, but suggests it won't materialize within the next 18 months. Speaking to the Farming Independent, Kelly emphasized that the timing hinges on clarifications around Derogation regulations.
Kelly highlighted historical patterns of consolidation every decade, noting that dwindling milk supplies and efficiency drives will accelerate this trend. Despite concerns about potential Derogation losses affecting 25% of the co-op's milk pool from farms, he indicated a lack of contingency plans, underscoring the catastrophic impact such an event would have on the industry.
Engagement with stakeholders aims to underscore the unique profile of Irish dairy at a European level. Kelly stressed the need for representation to grasp the ramifications for rural Ireland if Derogation is lost.
Regarding mergers, Kelly emphasized a reactive stance due to ongoing resizing strategies, indicating a preference for avoiding additional facilities.
While current milk prices slightly outpace the market, Kelly expressed confidence in stability for the first half of the year, with future trends hinging on supply dynamics in the latter part.
Engagement with stakeholders aims to underscore the unique profile of Irish dairy at a European level. Kelly stressed the need for representation to grasp the ramifications for rural Ireland if Derogation is lost.
Regarding mergers, Kelly emphasized a reactive stance due to ongoing resizing strategies, indicating a preference for avoiding additional facilities.
While current milk prices slightly outpace the market, Kelly expressed confidence in stability for the first half of the year, with future trends hinging on supply dynamics in the latter part.
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