Post-Brexit milk shortage fears are overplayed, says Aurivo boss
Aurivo chief, Aaron Forde, has played down IFA warnings of looming milk shortages on supermarket shelves.
Speaking after the publication of Aurivo's full year financial results, which reported a total operating profit of €3.56m, a 25pc increase on 2015, said the northwest based co-op has seen no evidence to support IFA's claims of an impending drop in milk supply due to Brexit.
"We are the second largest player in the liquid milk business on the island of Ireland and it is certainly not something that we are seeing evidence of.
"I wouldn't dismiss it entirely but I don't think it's an immediate issue. At the same time it's very important that the distribution of returns along the supply chain is adequate so our farmers are rewarded adequately to ensure a healthy pipeline of supply for the future," he said.
Last month, in light of the triggering of Article 50 in the UK, IFA president Joe Healy warned that milk produced over the winter months will soon fail to meet demand because farmers aren't being paid enough to milk cows during the season.
He said pressures on supplies could be exacerbated by the Brexit process - and the impact on trade with Northern Ireland in particular.
"26pc of milk on supermarket shelves comes from Northern Ireland. The IFA strategy identifies the challenges and provides solutions which can secure locally-produced, high-quality fresh milk year round, while nurturing this valuable €530m market," said Mr Healy at the launch of IFA's Milk Wise 2015 strategy.
Despite recording a 7pc drop in turnover to €391m, Mr Forde is "pleased enough" with Aurivo's profits.
"We're pleased with the outcome, it's important there is a strong sustainable business there for farmers at the end of the day and that means having some funding for re-investment.
"The first half of the year was difficult, for farmers and business, the second half was somewhat better," he said.
Aurivo's consumer foods revenues for 2016 are €88.4m - up €8m on 2015, dairy ingredients revenues stand at €102.1m - up €2.6m are driven by new retail partnerships, most notably with Tesco and growth for Connacht Gold brand.
The company's sports nutrition business saw volumes increase by 31pc. However, agri business revenues fell to €97m - down €4m on 2015, marts revenues also experienced an €8m drop to €78.5m. "The main reason for the decline is that the average price per head of cattle was down about €84 on the previous year," said Mr Forde.
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