NI farmer-owned co-op Dale Farm has confirmed it is investing £70m in cheddar cheese production at its Dunmanbridge site outside Cookstown in Co Tyrone.

The expansion, which is one of the largest ever single investments by an agri-food company in NI, includes a new high speed automated cheese slicing line as well as increased warehouse space. It is expected that cheddar cheese capacity will increase by 20,000t annually.

The work is already well underway and is expected to be complete by February 2025, ahead of peak milk supply in May of that year.

The latest move is a continuation of a strategy going back to 2009/2010 when the company decided to invest in cheddar cheese as opposed to milk drying at Dunmanbridge. Over the next decade close to £60m was spent, leaving the plant capable of producing 60,000t of cheese annually.

Speaking to the Irish Farmers Journal, Dale Farm Group chief executive, Nick Whelan explained that the new £70m spend is effectively about “asset replacement alongside putting in some capacity for growth”.

The company is getting out of the milk drying business, with two older dryers at Dunmanbridge being decommissioned in 2025. That will free up 100m litres of milk for the cheese plant, which equates to around 10,000t of cheddar.

At present, around two-thirds of the Dale Farm milk pool of approximately 900m litres goes to cheddar. That will increase to around three-quarters when milk drying comes to an end.

However, with 20,000t of new cheese capacity, there is the potential to handle a further 100m litres of milk. That could potentially come from 1% annual growth in the milk pool over the next 10 years.

Cow numbers

While Whelan accepts other factors such as environmental controls, might constrain future cow numbers, he points out that advances in genetics and feeding management will still continue. “Adding that capacity is the prudent thing to do,” he said.

As well as cheddar, Dale Farm is also investing in facilities to handle more whey protein concentrate (WPC), a by-product of cheese manufacture. This WPC is shipped to Arla Foods to be used in infant formula manufacture. It is a relationship that has been “good” for both parties, said Whelan.

He also outlined how Dale Farm has been successful in securing a patent for cheddar produced at Dunmanbridge. This patent relates to functional curd / young cheese used in the fast food and ready meal sectors. These businesses are important customers for Dale Farm.

While sales of cheddar cheese into retail are growing, especially in Europe, the consumer trend is towards mature and extra mature, which requires dairy companies to hold a lot of stocks and puts pressure on working capital.