Farm Ireland

Monday 20 November 2017

Farmers launch new milk solids payment campaign

Darragh McCullough

Darragh McCullough

A new national dairy group calling themselves Dairy Ireland are set to launch a campaign to overhaul the way farmers are paid for their milk.

The group wants a payment system similar to that operated in New Zealand where returns are based on milk solids rather than volumes.

Details on the proposals are to be outlined at a Dairy Ireland conference in the Firgrove Hotel, Mitchelstown, Co Cork, next week.

The move will mirror similar initiatives being undertaken by Europe's largest dairy co-op.

Friesland Campina board member Frans Keurentjes, who will be speaking at the conference, said that the Dutch giant is in the process of moving to a new payment model that will be based more on milk solids.

Friesland Campina paid their 15,000 farmer suppliers an average of 38c/l of milk at 3.4pc protein and 4.4pc fat in 2012.

The price is based on the average price paid by 17 different dairy processors that buy 45bn litres of milk in four EU countries, along with an end-of-year bonus reflecting 50pc of the profit generated above this price.

"We are not worried about the product mix of the other processors. This price is totally transparent and reflects the integral value of a litre of milk. It's up to the management at Friesland Campina to make a profit after paying this price," said Mr Keurentjes

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Mr Keurentjes, who milks 200 cows, believes that farmers have the power to control their own fortunes if they think big.

"If farmers pool their milk, money and intelligence, they can conquer the markets. But they must take responsibility for their own future," he said.

Friesland Campina was formed in 2008 with the merger of Holland's two largest dairy co-operatives.

It processes more than double the total Irish milk pool annually. Dutch processors have signalled plans to invest more than €700m in processing facilities over the next two years. This equates to almost a 5c/l of milk processed.

Mr Keurentjes said that the Dutch dairy industry is not worried about Irish plans for increased milk output.

"One drop more or less is not really an issue on the global scale. We are more interested in what the Irish plan to do with their milk," he said.

Other speakers at the Dairy Ireland conference are Dairygold CEO Jim Woulfe and Rabobank's Barry Henry.

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