Do­mes­tic, overseas suit­ors eye­ing up LacPa­trick deal

Irish Independent - Farming - - NEWS - LOUISE HO­GAN AND MARTIN RYAN

CON­CERNED farm­ers have urged that LacPa­trick Dairies must be given the “space and time” to de­cide the best op­tion for the Bor­der re­gion co-op.

It comes as at least one overseas in­vestor, along­side do­mes­tic co-op­er­a­tives, have ex­pressed an in­ter­est in a pos­si­ble tie-up with the dairy pro­ces­sor.

Any merger would need back­ing from 75pc of mem­bers and Lake­land Dairies is un­der­stood to be the most likely part­ner.

How­ever, in­dus­try sources have also in­di­cated Aurivo is now look­ing at LacPa­trick.

Glan­bia Ire­land’s Jim Ber­gin re­fused to say if they may be in­ter­ested in the co-op. “We have a num­ber of ar­range­ments in place and we’ve good re­la­tions with them and that will be down to the board to de­cide at some point,” he said.

A spokesman for Lake­land Dairies said they noted LacPa­trick’s state­ment but de­clined to com­ment. “LacPa­trick is a sub­stan­tial busi­ness with strong her­itage in co-op­er­a­tive dairy farm­ing,” he said.

How­ever, North­ern Ire­land’s Dale Farms, which is owned by over 1,300 dairy farm­ers across the UK, stated it was “in­ter­ested”. LacPa­trick, which has a cross-Bor­der milk pool, con­firmed that it is look­ing at pos­si­ble deals in­clud­ing part­ner­ships, joint ven­tures, merg­ers and other op­por­tu­ni­ties to con­sol­i­date the dairy in­dus­try. It fol­lows a num­ber of ap­proaches in re­cent months.

The busi­ness is prof­itable and has made sig­nif­i­cant in­vest­ment to Brexit-proof its op­er­a­tions, but many sup­pli­ers were left dis­grun­tled af­ter its most re­cent milk price an­nounce­ment.

ICMSA pres­i­dent Pat McCor­mack said that the co-op needed the “space and time” to as­cer­tain the “best op­tion” for the co-op and their farmer-sup­pli­ers.

Af­ter meet­ing with LacPa­trick yes­ter­day, IFA Ul­ster North Le­in­ster chair Nigel Re­naghan said farm­ers were con­cerned as to what this move might mean for them. He said the “liveli­hoods” of milk pro­duc­ers must not be neg­a­tively af­fected.

Mean­while, Mr Ber­gin, who was among those ad­dress­ing an IFA-EU Com­mis­sion Cit­i­zens’ Di­a­logue event on CAP in Kilkenny, said the milk mar­ket was cur­rently re­turn­ing around 27c/l.

Mr Ber­gin said the “pain” that farm­ers feel when price re­duc­tions oc­cur are un­nec­es­sary if the “right volatil­ity” schemes were in place. He said around 2,000 Glan­bia sup­pli­ers were signed up to fixed milk price schemes.

Mr Ber­gin said there was still a sig­nif­i­cant vol­ume of SMP in stor­age. He said but­ter prices had im­proved, while ched­dar was slightly up. “The prob­lem is the skim is so low. The intervention price of skim is €1,700/t and it is sell­ing out at €1,050/t,” he said.

Euro­pean Agri­cul­ture Com­mis­sioner Phil Ho­gan said the mar­ket would con­tinue to be man­aged in re­la­tion to the dis­posal of the stocks of skimmed milk pow­der (SMP).

“There is a lot more in­ter­est now be­cause mar­kets are hard­en­ing again, we have $74 a bar­rel for oil again in the pur­chas­ing coun­tries for much of our SMP which is the high­est in four years. So I hope that con­tin­ues.” He said 17pc more SMP was sold in 2017.

IFA dairy chair­man Tom Phelan told farm­ers at Croom, Co Lim­er­ick that “the hon­ey­moon is well and truly over” for the sec­tor and a “more sus­tain­able model” was needed in the fu­ture.

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