Opinion: Dale Farm is a model for Irish farming and food
The news last week that very healthy profits were on the cards at Dale Farm represents a real boost for the dairy sector and agriculture as a whole across the island of Ireland.
Profitable processing is the only way to deliver sustainable prices at the farm level. It should also be noted that Dale Farm continues to achieve this high level of performance while paying its producer-members a record price for their milk.
So hopefully this momentum can be maintained.
Dale Farm CEO Nick Whelan makes no secret of the fact that inflationary pressures within the business pose the biggest challenge for the co-op here and now. So it’s really about getting retailers to recognize that and pay their suppliers accordingly.
All this at a time when the issue of food safety is back on the agenda all over Europe and beyond.
Potentially this is a win-win scenario for Irish agriculture. When consumers feel there is a shortage of food, they suddenly start to really appreciate the work that farmers do on their behalf, every day of the year.
It also means that the price of food becomes a secondary issue. Or, at least, that’s the theory.
But the reality remains that primary producers need to get more from the market just to survive.
Irrespective of future support schemes for Farm Ireland, the Common Agricultural Policy (CAP) and national funding sources, the amount of public funding going to agriculture is set to decline, in real terms, over the next few years. years.
Until now, it has been almost impossible to obtain meaningful price increases for farmers for the food they produce.
This is now starting to change. And yes, it had to, given the unbridled pressure that has impacted all input costs over the past year and more.
But it is important that the gains made in terms of better farmgate prices are saved for the future.
World food markets are truly international in nature. They operate on the basis of supply and demand pressures.
If we take the UK – Ireland’s largest market – as an example; national food self-sufficiency levels continue to decline.
Given events in Ukraine and surrounding areas, I think it is unlikely that countries like Australia and New Zealand will pay as much attention to the UK market in the next few years.
They will be too busy making up for the shortfall created by the decline in Ukrainian food production in Middle and Far Eastern markets.
Under these circumstances, one would like to think that the opportunities for Irish food processors to make bigger inroads with all major UK food multiples are significant.