LacPatrick under the spotlight on April milk prices

Consultants due to report this week on border co-op's financial position

Former LacPatrick chief executive Gabriel D’Arcy
Former LacPatrick chief executive Gabriel D’Arcy
Louise Hogan

Louise Hogan

LacPatrick will be back in the spotlight this week as dairies announce their April milk prices.

Although the Ulster co-op is among the last processor to set its milk quotes each month, the price levels set by local competitors Lakeland Dairies and Glanbia will be closely watched by LacPatrick's management and suppliers.

Confirmation of a 5.5c/l cut in March milk returns for LacPatrick's Southern suppliers - and a drop to 25p/l for its Northern farmers - sparked the current troubles at the dairy.

In the face of a furious reaction from its dairy farmers, LacPatrick's board announced a "strategic vision" for the business which included a suite of options - "partnerships, joint ventures, mergers and other opportunities".

The co-op insisted this week that it had only lost between eight and 14 milk suppliers as a result of the milk price cuts, but returns for its farmers are trailing its competitors by around 2c/l.

LacPatrick's VAT-inclusive milk price fell from 35.75c/l in February (which included an early calving bonus of 3c/l for January and February) to 30.25c/l for March.

Close to 500m litres of LacPatrick's milk pool is supplied by around 700 farmers in the North, with the remaining 100m litres coming from around 300 Southern farmers.

Holding suppliers on both sides of the Border could be a difficult balancing act for LacPatrick's management, industry sources maintained.

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Farmers will want the co-op to match the base price paid by competitors, at a time when the markets are returning less than what they have to pay for milk supplies, they explained.

Financial consultants EY are expected to finalise a report on LacPatrick's trading and financial position this week, which will then be presented to interested parties.

Four businesses have been touted as possible merger candidates: Dale Farm in the North, as well as Aurivo, Lakelands and Glanbia.


A spokesman for LacPatrick confirmed that talks on a possible merger will be handled by the co-op board.

"LacPatrick chairman Andrew McConkey, vice chairmen Keith Angew and Robert Skelton as well as Alan McCay from the board are managing this process. This review team will report their findings back to the board. The ultimate say in this whole process is with the LacPatrick shareholder," the spokesman said.

"The role of the chief executive is to run a company, and Gabriel D'Arcy continues to run the day-to-day operations of LacPatrick. Farmers continue to milk cows, LacPatrick must continue to process that milk and serve our range of national and international companies while delivering the maximum returns to the LacPatrick suppliers."

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