'The prices have to be realistic and there has to be a margin for everyone'
Published 11/05/2016 | 02:30
"The next 10 months are going to be 10 tough months," says the boss of the northwest-based Lakeland Dairies group.
After a week that saw the Co Cavan-headquartered co-op announce a crossborder merger, Michael Hanley is now eyeing up a milk pool of 1.1 billion litres which would make Lakeland the third largest processor in the county.
On a good note it has customers for all of the 240 million litres of extra milk from the newly acquired Northern Ireland-based Fane Valley co-op's dairy business. Yet in the face of the current 'supply verses demand' war it is naturally at lower prices.
"The dairy markets are tough, the background is tough. Dairy has always over the last 20 or 30 years been volatile, good days and bad days. But on average over the last 30 years dairying has raised a lot of families, it has educated a lot of families, it has paid a lot of bills, it has paid for a lot of investments," said Roscommon native Hanley (57) signalling a more positive note for struggling dairy suppliers.
"Dairying has outperformed all other farm enterprises whether they be tillage, beef or sheep, dairying has always outperformed and over the next five years we'd be very confident that dairying would continue to outperform all other farm enterprises."
Hanley feels farmers and processors have been unwittingly caught up in the geo-politics at EU level that has seen Russia ban EU produce.
"European farmers have seen a market for over 400,000t of dairy products evaporate in front of their eyes. They've a glass ceiling, they are looking in at that market and through no fault of their own they can't sell into that market," he says.
"China has been buying less and there seems to be less revenue about in the oil importing countries," says the man who started off in the baled silage business before working his way up from member relations manager with Lakelands in 86. As he took over as CEO in 2006, the business had recorded losses of over €13m in 05 and 06.