Farm Ireland

Saturday 18 November 2017

Strathroy goes head to head with Glanbia and Lakelands for suppliers

Strathroy tanker
Strathroy tanker

Farming Independent Team

Strathroy Dairies are openly touting for milk suppliers along the east coast in a move that will bring the Tyrone-based company into direct competition with Glanbia and Lakelands.

The company has confirmed that it is interested in hearing from both established and new entrant dairy farmers.

Preference will be given to spring calving suppliers in the eastern half of the country, which would suit their current collection infrastructure, said Ruairi Cunningham, who owns the Tyrone-based processor along with his brother Cormac.

The Cunninghams accept that moving dairy processor has become more difficult since the advent of milk supply agreements (MSAs), however, the Strathroy boss insisted that farmers still had choice.

"We are not expecting a rush of new suppliers just now. But we want to make suppliers aware that there are alternatives to their current processor," said Cunningham.

"Many suppliers are tied into restrictive MSAs, and cannot change that situation for a couple of years. However, they need to put in their notice to change," he explained.

"Suppliers may not wish to change processor at all. But if they do not give notice, they are really restricting their options. Strathroy is keen to explain what it has to offer," he added.

Strathroy has an existing base of close to 160 farmers in the Republic supplying close to 86m litres.

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The bulk of these are located along the east coast.

Ruairi Cunningham claimed the company had "no issue" doubling their Southern milk pool if it were possible. In addition, he has not ruled out developing a processing base in the Republic if Brexit becomes an issue for the sector.

In 2014 close to 20m litres of the 103m litre Wexford Creamery milk pool opted to transfer to Strathroy following dissatisfaction with the deal done between Wexford and its purchaser Glanbia.

The development is widely credited with providing enhanced conditions for new suppliers that did eventually sign up with the Kilkenny-based giant.

Any new battle for suppliers along the east coast is likely to pitch Strathroy against Glanbia once more - with Lakeland Dairies also in the firing line.

Dairy farmers could again be the primary beneficiaries from any such competition.

March milk price

Meanwhile, Lakelands and Glanbia have confirmed that they are holding their March milk prices at 31.28c/l and 31c/l respectively.

Both the IFA and ICMSA had argued that there was room for processors to move to a base of 32-33c/l for the month.

However, industry sources have warned that the outlook for milk prices remained uncertain. Aurivo chief executive, Aaron Forde, said processors needed to be "cautious" on milk price over the coming months.

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