The dairy industry has been hit hard by the COVID-19 pandemic, which has caused a significant shift in consumer demand for milk and dairy products. In response, Lakeland Dairies, the second-largest dairy cooperative in Ireland, has warned that the price of milk is likely to fall back further in the coming months. The CEO of Lakeland Dairies, Michael Hanley, has stated that this is an inevitable outcome as the global dairy market continues to be impacted by the pandemic. The dairy sector will need to adapt and innovate in order to survive and thrive in the coming years. This article will explore the factors behind the fall in milk prices and what the future might hold for the dairy industry.
According to Lakeland Dairies CEO Colin Kelly, the milk price is likely to contract further in the short term as the market determines returns. This news came after the publication of the cooperative’s annual report. As the market is currently returning less than the milk price, a contraction seems inevitable. In terms of what level that contraction will be, it is up to the board and management team in Lakeland to set it. While the inputs have never been higher, the milk price has dropped, making 2023 a challenging year for farmers. Kelly acknowledged that farmers are moving into a crucial six-week period ahead of silage cutting, and the cooperative will be doing everything in its power to support its shareholders and suppliers even though further milk price correction looks inevitable. Lakeland Dairies announced a 6c/L cut in its milk price for February supplies due to weaker market conditions, and it was the second consecutive month where the price to suppliers had been down.
As the CEO of Lakeland has pointed out, the inevitable decrease in milk prices will have a significant impact on the dairy industry. While the reasons for the decline are complex and varied, it is clear that farmers and milk producers must take proactive steps to mitigate the effects of this trend. Whether through diversifying their operations or investing in new technologies, it is important for those in the industry to be prepared for the challenges that lie ahead. Ultimately, by working together and embracing innovation, we can adapt to the changing landscape and find new ways to thrive in an ever-changing market.
