Thomas Lyons 
The dairy industry in Ireland is facing significant challenges, according to Conor Galvin, CEO of Dairygold. Galvin has warned that if milk prices move closer to the cost of production, it will create concerns for the industry. Dairygold, which is headquartered in Mitchelstown, recently reported a record turnover of €1.65 billion for 2022. However, Galvin has cautioned that the industry is currently operating in volatile conditions and is going through a period of significant uncertainty. He has also indicated that weaker market conditions in 2023 have already impacted prices and that the dynamic between the markets and the cost of producing milk has changed.
In 2022, Dairygold paid a historically high milk price of 62.4 cent per litre to farmers, based on the average constituents received, including bonuses, plus VAT. But Galvin has warned that this year’s weaker market conditions have already impacted prices. He noted that there has been an increase in the supply of milk in the last six months, which has led to current supply possibly exceeding demand for a lot of products. Galvin added that the commodity markets are now down more than 30% compared to the 2022 highs, which is starting to reflect on milk prices.
Galvin said that the co-op anticipates a positive milk margin in 2023, but this will be against a very different backdrop compared to last year. He acknowledged that the cost of producing milk and processing milk is higher than the five-year average, and this will have to be taken into account in the price that can be achieved for the litre of milk in the market. Last month, Dairygold confirmed a cut in the February quoted milk price, reducing it by 6c/L to 46c/L. Galvin has warned that if milk prices were to cross a certain threshold in Ireland, it could create a very difficult scenario for some farm families.
Galvin has stated that the role of the co-op is to deliver the maximum value back to the milk supplier from what can be achieved in market returns. He added that the co-op needs to ensure that it is maximizing value on the market and managing the cost of inputs to its milk suppliers where possible. Galvin also noted that the co-op needs to keep the cost of production under review and manage it where possible, while delivering the highest milk price possible to drive on-farm margin.
Galvin has emphasized that the dairy industry is facing significant challenges due to the volatile market conditions. He has also acknowledged that the cost of producing milk and processing milk is higher than the five-year average. Galvin has urged the co-op to keep the cost of production under review and manage it where possible. He has also emphasized the importance of delivering the highest milk price possible to drive on-farm margin. If milk prices were to cross a certain threshold in Ireland, it could create a very difficult scenario for some farm families.
In conclusion, the dairy industry in Ireland is facing significant challenges due to the volatile market conditions. Dairygold has reported a record turnover of €1.65 billion for 2022, but Galvin has warned that this year’s weaker market conditions have already impacted prices. He has emphasized the importance of delivering the highest milk price possible to drive on-farm margin while keeping the cost of production under review and managing it where possible. Galvin has also warned that if milk prices were to cross a certain threshold in Ireland, it could create a very difficult scenario for some farm families.
