LacPa­trick un­der the spot­light on April milk prices

Con­sul­tants due to report this week on bor­der co-op’s fi­nan­cial po­si­tion

Irish Independent - Farming - - NEWS - LOUISE HO­GAN

LACPA­TRICK will be back in the spot­light this week as dairies an­nounce their April milk prices.

Al­though the Ul­ster co-op is among the last pro­ces­sor to set its milk quotes each month, the price lev­els set by lo­cal com­peti­tors Lake­land Dairies and Glan­bia will be closely watched by LacPa­trick’s man­age­ment and sup­pli­ers.

Confirmation of a 5.5c/l cut in March milk re­turns for LacPa­trick’s South­ern sup­pli­ers — and a drop to 25p/l for its North­ern farm­ers — sparked the cur­rent trou­bles at the dairy.

In the face of a fu­ri­ous re­ac­tion from its dairy farm­ers, LacPa­trick’s board an­nounced a “strate­gic vi­sion” for the busi­ness which in­cluded a suite of op­tions — “part­ner­ships, joint ven­tures, merg­ers and other op­por­tu­ni­ties”.

The co-op in­sisted this week that it had only lost be­tween eight and 14 milk sup­pli­ers as a re­sult of the milk price cuts, but re­turns for its farm­ers are trail­ing its com­peti­tors by around 2c/l.

LacPa­trick’s VAT-in­clu­sive milk price fell from 35.75c/l in Fe­bru­ary (which in­cluded an early calv­ing bonus of 3c/l for Jan­uary and Fe­bru­ary) to 30.25c/l for March.

Close to 500m litres of LacPa­trick’s milk pool is sup­plied by around 700 farm­ers in the North, with the re­main­ing 100m litres com­ing from around 300 South­ern farm­ers.

Hold­ing sup­pli­ers on both sides of the Bor­der could be a dif­fi­cult bal­anc­ing act for LacPa­trick’s man­age­ment, in­dus­try sources main­tained.

Farm­ers will want the co-op to match the base price paid by com­peti­tors, at a time when the mar­kets are re­turn­ing less than what they have to pay for milk sup­plies, they ex­plained.

Fi­nan­cial con­sul­tants EY are ex­pected to fi­nalise a report on LacPa­trick’s trad­ing and fi­nan­cial po­si­tion this week, which will then be pre­sented to in­ter­ested par­ties.

Four busi­nesses have been touted as pos­si­ble merger can­di­dates: Dale Farm in the North, as well as Aurivo, Lake­lands and Glan­bia.

Talks

A spokesman for LacPa­trick con­firmed that talks on a pos­si­ble merger will be han­dled by the co-op board.

“LacPa­trick chair­man An­drew McCon­key, vice chair­men Keith Angew and Robert Skel­ton as well as Alan McCay from the board are man­ag­ing this process. This re­view team will report their find­ings back to the board. The ul­ti­mate say in this whole process is with the LacPa­trick share­holder,” the spokesman said.

“The role of the chief ex­ec­u­tive is to run a com­pany, and Gabriel D’Arcy continues to run the day-to-day op­er­a­tions of LacPa­trick. Farm­ers con­tinue to milk cows, LacPa­trick must con­tinue to process that milk and serve our range of na­tional and in­ter­na­tional com­pa­nies while de­liv­er­ing the max­i­mum re­turns to the LacPa­trick sup­pli­ers.”

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