Ireland: Gearing Up For Growth

Volume 137, No. 16 Friday, October 12, 2012

As America contemplates a farm bill that includes a “stabilization” plan to curb milk production, Ireland and the EU have something entirely different in mind: explosive growth when milk quotas in Europe are eliminated in 2015.

Beginning September 28, a study group of Wisconsin cheese makers, butter makers and cheese processors toured Ireland’s cheese industry for nine days, and found an industry gearing up for growth.
Ireland’s cheese industry revolves around four major dairy cooperatives: Glanbia, Dairygold, Carbery and Kerry. Two of these giants, Glanbia and Dairygold, have announced plans for massive new milk drying plants in the face of anticipated milk growth.

Tim Purcell, cheese plant manager at Glanbia’s Ballyragget cheese and powders operation, noted “For the first time in 30 years, we’re expecting significant growth in milk volumes” when quotas end in 2015. The Cheddar plant at Ballyragget takes in more than 3 million pounds of milk per day. Between this site in Kilkenny county and another to the north, Glanbia Food Ingredients produces 31 percent of all cheese in Ireland.

Glanbia plans to meet milk expansion of 40 to 50 percent by 2020 with a new $250 million milk drying plant in Belview, Ireland capable of processing more than 2 billion pounds of milk per year.

Glanbia is known in the US for its Idaho cheese facilities and its joint venture, the American-styles mega-plant operated with the Greater Southwest Agency in Clovis, New Mexico.

The Irish Dairy Board, the export marketing arm of Ireland’s dairy industry, confirms Glanbia’s projections for milk growth. The Board projects that 50 percent more milk from Ireland’s farms by 2020 translates to 50 percent more cheese production (up to 500 million pounds); 63 percent more butter (reaching 540 million pounds) and whole milk powder doubling to 260 million pounds of production.

Ireland’s target markets for these new dairy products? The United Kingdom and continental Europe, according to Joe Collins, managing director, dairy trading and ingredients division, with the Irish Dairy Board. Today, 66 percent of Irish cheese is sold in the UK.

Lower milk prices and a record cool, wet summer in Ireland may have dampened farmers’ expansion fever, according to a survey by Ireland’s Farming Independent. A survey of 212 Irish dairymen in September found 62 percent planned to expand their farms, and half of those expected growth of 20 percent. Among other “expanders,” 40 percent plan to build 50 percent more milk and the final 10 percent plan to grow more than 50 percent.

Ireland’s 18,000 dairy farms are small on average, about 70 cows, and take advantage of Ireland’s healthy supply of rainfall to graze cows on pasture. It’s a low-cost, low-input system most closely comparable to New Zealand, and dairy production is built on commodity products built to travel in world markets.

While a perfect estimate for future growth is uncertain after the EU abolishes milk production quotas, Dairygold Food Ingredients, too, has announced a $150 million expansion to add two new milk dryers to its Mallow dairy plant in County Cork.

The WCMA tour group visited Dairygold’s plant in Mitchelstown, billed as the largest cheese factory in Ireland, with milk intake of 3.8 million pounds per day. Plant manager Eugene O’Connor was pleased to display the gold medal the plant earned for aged Cheddar at the 2010 World Championship Cheese Contest.

Dairygold, like the other major co-ops, has built a cheese production model around Cheddar, and like styles, produced in 44-pound (20-kilogram) blocks for retail and industrial markets. Grazed milk imbues Ireland’s aged Cheddars with a rich, clean bite.

Aside from the Cheddar giants, Ireland has a growing number of artisan cheese makers burnishing the image of Ireland’s dairy industry. Our 43 tourists squeezed into Mary Burn’s small cheese make room in County Cork. Mary’s Ardrahan cheese, a washed rind original, is made at the family farmstead. The cheese ripens quickly and is ideal between six to 12 weeks. Ardrahan can be found in Whole Foods and other US cheese retailers.

Two years ago, with the help of government grants, Beechmount Farm in Tipperary expanded its farmstead operation making Cashel Blue cheese. Louis Grubb and son-in-law Sergio Furno proudly showed the tour group a gleaming commercial facility for production of the creamy Blue wheels.

Government assistance is a common thread in expansion projects detailed at Glanbia, Dairygold, Beechmount, and Carbery. State grants of 40-50 percent of project costs were noted in recent plant upgrades and future expansion plans. Dairy and meat are Ireland’s top two strategic export markets, according to the Irish Dairy Board, and financial assistance backs up the strategic objective.

Ireland’s grass-based, Cheddar-centric dairy business model is difficult to compare to the US dairy industry.

But it was heartening to see a nation gearing up for growth, and embracing dairy as a crucial, modern industry. Dairying in the US, ever-growing in a flat economy, deserves the same attention. JU

John Umhoefer has served as executive director of the Wisconsin Cheese Makers Association since 1992. You can phone John at (608) 828-4550; Fax him at (608) 828-4551; or e-mail John Umhoefer at jumhoefer@wischeesemakersassn. org

Other John Umhoefer Columns

 Mired in Wash Water
 Less Government, More Dairy
An Interview With Jim Sartorii
The Other Solids Price Crush

 The Policy Answer Is Exports
 Rolling The Dice On Dairy Reforms
 Productive Changes In Wisconsin

 The Successful Idea Of DBIC
 Cheese Cuts Both Ways:
Consolidation and Growth
 IDFA's Deep Dairy Reforms
 Wisconsin In The Spotlight
 An Overbuilt Foundation

 What the New Governor Means To Wisconsin
 No Man's Land
 Dairy & Wisconsin’s New Leadership

Wisconsin Cheese Is Investing, Expanding
 Talking Competition
 Being Big Dairy
Upper Midwest Prospects in 2010
Upper Midwest Growth: Perspectives From The Farm
Blue Skies or Bust
Pushing Back Against A Tough 2009
Support Demand, Not Price
Dairy: A Good Bet in a Bad Economy
Wisconsin's Future: Growth
Keeping Sustainability Real
Nose Dive
Dairy Dives into 2009
Consider This...
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Implement Make Allowances ASAP
Security Reforms
Spring Forward
A Week of Clarity

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