Co-ops to process over a billion litres of milk in €670m joint venture
One of the largest co-ops in the State, Lakeland Dairies, has struck an agreement with a Northern Ireland business, Fane Valley, that will see them process more than a billion litres of milk in a €670m joint venture.
The move between the Cavan-based processor and the Co Down co-op will also see the merging of their feed manufacturing, sales and stores into a major agribusiness company with projected revenues of €175m.
The farmer-owned co-ops highlighted that the new joint ventures would ensure improved competitiveness, greater efficiencies and stronger buying power.
It also signalled that it may go a step further and put a full merger of both co-ops to a members' vote in the future.
It comes at a time when milk prices have plummeted by a third since last year, with farmers in Northern Ireland blockading supermarkets over plunging prices in recent days.
The Irish Farmers' Association's (IFA) dairy chairman Sean O'Leary said he had been calling on processors to carefully examine their efficiencies at a time when prices are under pressure.
"We'd be urging co-ops to look at synergies, joint ventures or to work closely with other co-ops in the best interests of suppliers to be able to give farmers higher prices for milk," he said.
Mr O'Leary also said with the recent merger of Town of Monaghan and Ballyrashane co-ops, it was a clear signal that more consolidation was likely in the dairy sector.