DAIRY farmers in Fermanagh could be facing an uncertain future after one of the main milk collectors here announced it was looking to tie up with another business.
The LacPatrick Dairies co-op which collects milk from farmers in borders areas, including many in Fermanagh, is thought to have received offers from two Irish dairy firms and an international operator.
Dairy farmer Tom Elliott, from Ballinamallard, believes there will certainly be an impact in the county, but it won’t be huge.
“The big problem is going to be one less business in the marketplace. Once you take a big player out of the market then there is less competition,” he contended.
“Lakeland Dairies have grown considerably over the past few years and are already purchasing a huge amount of milk from Fermanagh. They are probably the next biggest behind Dale Farm, but that means less competition in the market.
“This will certainly affect dairy farmers on the basis that if there are less competitors for the milk then there is going to be less bidding for it,’ said Mr Elliott.
“There are less bidders for the milk and you could end up with just two large buyers, almost like a monopoly.”
Mr Elliott estimates that it would affect over 500 dairy farmers in the Fermanagh area.
“Dairy farming has changed in the area though. Years ago you might have a herd of 35-40, but today’s farms see up on 120 or more cattle in the herd.
“So when prices are good then the dairy farmer is doing very well, but when they take a dip then the dairy farmer suffers badly,” he added. “There is no floor in the market any more.”
LacPatrick informed its farmers late last week that it was considering its future, which could mean entering into “a merger, partnership or joint venture”.
LacPatrick Dairies chairman Andrew McConkey said: “The board of LacPatrick Dairies met on Tuesday, and have agreed on pursing a number of strategic options with a view to identifying the best way forward that is in the interest of suppliers, shareholders, staff and customers.
Dairy farmers enjoyed an uplift in prices for milk during 2017, but in a newsletter to its farmers this month, LacPatrick said it was reducing the price it pays.
In the newsletter, Mr McConkey remarked: “We must make sure that the co-op is sustainable and that we are in a strong position not only now but also into the future.
“There is too much milk being produced on the global market at present.”