“Post quota, dairy co-ops are now developing and implementing strategies that will help them compete in a global market.  One leadership challenge for all co-operative boards is to determine whether their strategic approach should be on a ‘go it alone ‘ basis or involve greater integration with some of their fellow processing and marketing co-operatives,” said Martin Keane, President of the Irish Co-operative Organisation Society Ltd (ICOS) at the Society’s AGM in Portlaoise this morning.

“ICOS has always been to the forefront in arguing for a strong and consolidated dairy sector, with profitable farmer controlled co-operatives delivering sustainable incomes to members. Further co-operative consolidation will ensure Irish dairy farmers have a strong presence in global markets and will  help support better milk price returns”

“The past decade has seen a very significant increase in the level of collaboration between dairy processing co-operatives particularly in the areas of milk assembly and co-processing.  ICOS is on record as supporting further co-operative consolidation and rationalisation between existing dairy co-operatives. ICOS has a record of facilitating such decisions, when made on the recommendation of individual co-operative boards and subject to the collective approval of shareholders.”

“ICOS fully recognises that a milk supplier has the right to choose who he deliver his milk to  – subject to the rules and the terms of any milk supply agreement being honoured. However, it is in nobody’s interests for a ‘free for all’ competition for milk to develop. History has shown that such a development can be destructive of co-op balance sheets and destructive of the overall economic value of the industry.”

“Many dairy farmers are making their own business plans around expanding their businesses. For some, part of this planning will involve consideration of their relationship with their co-operative. While fully recognising and supporting supplier’s rights to change those relationships, ICOS would urge individual farmers to give very serious consideration to the integrity of the co-operative, and to the wellbeing of their fellow members. “

“An exclusive focus on short term milk price performance – without regard for a co-operative’s longer term strategies – will result in a growing loss of supplier ownership and control in the marketplace.”

“Decisions made by individual suppliers  or small groups of individual suppliers are less appealing as they are more likely to lead to fragmentation, and a process of attrition.  Such actions, history shows, tend to weaken co-operative balance sheets and co-operative solidarity to the detriment of all supplier shareholders, he concluded.

ICOS (the Irish Co-operative Organisation Society) represents co-operatives and organisations in Ireland – including the Irish dairy processing co-operatives and livestock marts – whose associated businesses have a combined turnover in the region of €14 billion, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas.