Farm Ireland
Independent.ie

Tuesday 25 April 2017

Wexford bid is good for dairying

Declan O'Brien

Declan O'Brien

The announcement that Wexford Creamery's milk suppliers have made a €9m pitch to take a controlling stake in the business has to be seen as a positive development and one that should give confidence to dairy farmers in general.

The move is an ambitious one and the leaders of Wexford Milk Producers (WMP), the co-op that represents the creamery's 350 suppliers, deserve huge credit for having the bottle to take such a bold step.

This is particularly the case given the difficulties that dairy processors have faced over the past two years.

The proposed purchase confirms that farmers have enough faith in the dairy business that they are willing to put their own money on the line to finance this deal.

Even in the midst of the boom €9m would have been a considerable amount of money. In the current climate, it is a serious investment.

WMP chairman Michael Vaughan said the purchase of a further 50pc of the creamery shares -- which would give the suppliers a 70pc stake -- will enable the farmer co-op to determine its own future.

This observation will certainly touch a chord with many dairy farmers who believe that the processors they supply no longer represent their interests.

The difficulties which the sector has experienced since 2008 have strained the relationship between the producer and processor to breaking point.

Wexford has a reputation for manufacturing award-winning cheeses and the fact that this is the focus of their business is seen as a real positive.

It remains to be seen whether the deal, if agreed, will deliver benefits for suppliers in terms of milk price. But in light of the continuing pressure on dairy farmer incomes, returns to suppliers will be watched with interest if the takeover gets the green light.

Should Wexford end up paying more for milk than larger players in the business, the argument that "big is beautiful" may be undermined somewhat.

Irish Independent