Tirlán’s announcement of 150 voluntary redundancies is being looked at as a “canary in the coalmine” moment. Even the most gung-ho farmer realises that dairy expansion, as we have known it over the last decade, is now over.

Tirlán has moved quickly to ensure it is prepared for the next phase, where consolidation takes place after 10 years of extraordinary growth.

When Glanbia Ingredients Ireland purchased Wexford Creamery in 2013, the processing facility was the prize, the milk pool almost secondary.

Now there is spare processing capacity everywhere, and environmental restrictions are the new dairy quota. A pool of milk may be in itself marketable.

The Munster Dairy Producers Organisation will commence its recruitment drive of Kerry suppliers with a round of meetings which begin tonight, Thursday.

While open to all who milk cows, there is no doubt that this group is a vehicle to either forge a new relationship between Kerry suppliers and their processor, or be off as soon as their milk supply agreements expire in early 2026.

In that regard, the timing of the reported comment regarding production costs by Kerry Dairy Ireland CEO Pat Murphy could hardly have been worse.

Outcry

The inevitable outcry dissipated somewhat when it was clarified that Murphy regarded 30c/l as being the production costs attained by the best milk producers, not 20c/l, but damage had been done. It was the first time Kerry Dairy Ireland was in the public eye, with the opening of its Cheestrings factory, and it must be frustrating that the first scene in this act of the Kerry saga was a row that was almost farcical in nature.

It all puts terrible pressure on the negotiations between Kerry Co-op and Kerry Group over the future of the Irish dairy business.

Spare processing capacity

Contracting milk supply and spare processing capacity means every processor in Ireland is watching events unfold with interest. Some will be eying up the milk pool the producers’ organisation will assemble, while others will be fretting that their suppliers might take off for greener pastures if their current co-op can’t compete in the upper reaches of the milk league.

Any exit being subject to contract terms, of course.

Farmers must also remember that the 2,370 Tirlán employees, and indeed all the people employed in co-ops across the country, are people with families and mortgages of their own.

Sometimes at co-op meetings you get the sense that farmers want slimmed-down staffing, while still demanding a silver service.

At the same time, the farmers own the business and sometimes you would think management are the owners.

Meal and fertiliser are delivered when they would often have been collected 20 years ago, technical advice is expected on-farm and on tap, but these are resources that cost money to deliver. Maybe advice should be left to Teagasc? Farmers can’t have it all.