The average milk price in 2025 will be “higher than the average milk price in 2024” according to the group chief executive office of Lakeland Dairies, Colin Kelly.
He believes that 2025 will be a “different type of year” with “more volatility in it” but Kelly is also of the opinion that if farmers had a good year in 2024 they “will have a good year in 2025”.
The Lakeland Dairies CEO told Agriland that looking back on 2024 it was a “year of two halves”.
“I think you’ve got to look at the short term and the medium term, I think we made great progress in the short term,” Kelly said.
“I can only speak from the Lakeland Dairies’ perspective but we had a good year – that was evidenced in our loyalty payment of 0.8c/L and 0.65p/L which we will be paying out in January of this year. I would say when we come to look at profitability from a processor perspective 2024 would have been a better year than 2023 – but obviously 2023 was a very challenging year for everybody.
” If I look at it then from a farmer’s perspective, history buries the detail, and because there was a strong back end people say 2024 was a really good year.
“But I think it’s for us to remember the start of 2024 was brutal for farmers – if you look at how wet the spring was, you look at the amount of feed that had to be purchased, you look at how long it took cows to get out into onto grass, we then had a challenging summer and we had a very strong back end where prices were good margins, bodies and the milk flows were good so I would say on the whole 2024 was a good year for farmers,” the CEO of Lakeland Dairies said.
Lakeland Dairies
Kelly said looking ahead to 2025 the weather will again also “have a huge impact”.
“I believe pricing will be good but ultimately the weather will have a big impact on margins and mood for farmers, he added.
In a wide ranging interview as part of Agriland’s On the Record Series 3 the CEO of Lakeland Dairies also highlighted how the dairy sector is facing a number of key challenges this year from the nitrates derogation to succession issues.
“We’re very keen to get people into farming, we’ve had 500 new entrants – probably the biggest thing that we’ve had over the last three to four years is the Land Mobility Scheme, so what that’s effectively doing is matching up people that are looking to get out of farming and people who are maybe looking to get in but don’t have the land platform .
“What we’ve done since 2020 is we’ve had 10,000 acres transfer through that system so what that has meant is 10,000 acres which potentially would have left dairy farming have stayed in dairy farming because we’ve been in a position to match people up,” Kelly said.
He said in the short term the dairy sector is now waiting to see what will happen on the “promises made” to farmers during the European and General Election campaigns and on the nitrates derogation which Kelly believes will “ultimately have a huge impact on shaping what the future of Irish dairy looks like on this island”.