Darragh McCullough: Milking robots can teach Kerry Co-op a thing or two about moving with the times
You know you're getting old when you start remarking on the passage of time. So I was confirming my oldie status last week marvelling over technological advances in farming over the last 20 years.
For it was in 1999 that my dad installed three Lely robotic milking machines on the farm here at Elmgrove.
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He was among the first group of four farmers in the country to take the plunge, and it was all terribly exciting.
Remember, this was when I got my first mobile phone, and here was a machine that was able to send me a text message to say that there was a problem and flag a cow with mastitis.
It was the start of the Celtic Tiger and as a farm only 40km from O'Connell Street in Dublin, we were feeling the brunt of the sudden labour shortage.
It was also an era prior to the mass flow of migrant labour around the EU from new entrants like Latvia and more recently Romania.
So while the arrival of a machine that could extract clean milk from a kicking, defecating and urinating animal 24-7 seemed like a complete no-brainer, the first movers on new innovations rarely make the real savings.
In the subsequent years each of those first four farmers sold up their robots and reverted back to traditional herring-bone or rotary parlour set-ups.
But fast-forward 20 years and Lely have the fifth version of their robot available, where energy usage has been significantly reduced and the capacity has increased from a maximum of 60 cows per machine to the point where some farmers are covering 90 cows with each robot.
One of my dad's former discussion group colleagues is looking at installing up to five robots on his farm, bringing total robot numbers operating in Ireland to close to 1,200 on nearly 600 farms.
Worldwide there are an estimated 50,000 robots working. The next step for some farmers close to urban areas is the concept that they can pasteurise their own milk, and even offer speciality milk such as milk from a particular cow with naturally high levels of milk solids.
It feels like the holy grail of milking technology: a robotic arm that could work on either a rotary or a herring-bone set-up must be just around the corner. In fact a milking parlour manufacturer swore to me that he would have that concept commercialised within two years… five years ago.
And some of the fundamental issues with robots - such as their capital cost and adaptability to extensive grazing - are still stopping more farmers from going that route.
The milking robot proves to me that while nothing stays the same, change will always be gradual.
This might seem like an odd and long-winded introduction to the shenanigans going on down in Kerry Co-op this week.
But isn't it striking that a co-op which hasn't traded as much as a wheelbarrow in its own name in the last 33 years is still agonising over a way to wind itself up?
A fraction of the 13,500 shareholders will dutifully turn up for tomorrow's AGM and SGM.
It will be another session to agonise on the best way to minimise the tax bills on the €2.5 billion pile of shares that the co-op is sitting on.
The co-op board is pushing ahead with a scheme to buy out as many of the non-farmer shareholders as possible in order to regain agricultural status for the co-op, which will save every remaining shareholder a fortune in tax.
But in the process the co-op leadership is looking at using €80m to facilitate the development of new trading activities in the agricultural sector.
And with every passing year since the co-op has ceased trading, its 28-member board continues to receive up to the equivalent of €480,000 annually in the form of fees and expenses.
Over the course of the last 33 years, that's an equivalent cost of €15.8m to the rest of the co-op shareholders.
In the last three years since the plc told the co-op to bog off with themselves, the co-op's costs in consultants and secretarial services have ballooned from zero to over €1.5m annually.
And for what? A child could tell the board that it is time to wrap up the show and liquidate the co-op, and take the 33pc capital gains tax on the chin.
Instead, the old guard clings to past glories.
As milking robots show, change is gradual, but over time it's stark. Nobody leading Kerry Co-op seems to have realised that. But shareholders have only themselves to blame for the leaders they elected.
And maybe they've got so much money down there, it doesn't really matter one way or another.
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