Tirlán Anticipates a Creamy Future: Moderate Milk Volume Growth on the Horizon

"Chief Executive of Tirlán predicts shift from high to moderate milk volume growth following removal of milk quotas"

Tirlán CEO, Jim Bergin, has stated that the period of “high growth” following the removal of milk quotas is set to be replaced by “more moderate milk volume growth”. Bergin also shared that the year 2023 has delivered a “difficult start” for the co-op’s farmers with “significant drops in market returns” for both grain and milk. He attributes this to the “dynamics” that have made it a tough year for farmers so far, including high input costs and ongoing inflationary pressures. Specifically in relation to milk price, Bergin noted that commodity markets appeared to be beginning to “bottom out” but they were doing so “at a number that is south of 40c/L”.

Tirlán, the largest dairy processor in Ireland, published its first set of accounts and annual report as a “100% farmer owned business”. The report showed an operating profit for 2022 of €71.9 million. The co-op’s milk pool totaled 3.2 billion litres in 2022 and it sold more than 423,000t of dairy products and ingredient solutions into 100 markets last year. The co-op operates across three key business categories – ingredients, agribusiness, and consumer. Its latest financial results show that its ingredients division was the star performer during 2022, growing turnover by 40% to €2.1 billion.

Bergin said that 2022 had been a strong year “in the global commodity market” but it was also a year heavily influenced by “sharp inflationary increases in the cost of inputs” and supply constraints heightened by the war in Ukraine. In its 2022 annual report, Tirlán highlighted that in relation to its ingredients division “selling prices advanced strongly in 2022 reflecting strong dairy commodity markets” but that overheads had also increased substantially. The co-op outlined that “the price paid to milk suppliers similarly increased. From an operational perspective, milk volumes were down by 0.5% in calendar year 2022 compared to 2021, while milk volumes in peak week showed a 2% reduction on the figures at peak in 2021”.

Despite the challenges, Tirlán delivered the highest milk price in its history last year – of 63c/L (including VAT) – to its 4,327 dairy farmers. However, Bergin warns that the remainder of 2023 will be a very different year from 2022. He cautioned that markets were more challenging and to date, there may be some pickup in the last quarter, but there is no significant change to supply patterns currently.

Tirlán has four separate ingredient processing facilities in Ballyragget and Belview in Co. Kilkenny, Virginia, Co. Cavan, and in Wexford. The co-op has been a key player in the Irish dairy industry for over 100 years and has continually evolved to meet the changing needs of its customers. Now, as a fully farmer-owned business, it is well-positioned to continue to drive growth and innovation in the sector.

Categories: Agriculture