Co-op chief executives north and south have issued clear warnings that milk processing capacity at peak could be affected if a plant loses employees to COVID-19 restrictions. Rather than a lack of investment in steel, the warning relates more to the availability of skilled personnel if an outbreak occurred in a milk plant at short notice.
As an industry, we are doing our best to mitigate risks
However, co-op chairs contacted by the Irish Farmers Journal say they have no plans in place to reduce farmer supply at the moment.
Pat Murphy, Dairy Industry Ireland (DII) chair, suggested that while processing capacity was and is always stretched at peak, this year brought the added complexity of COVID-19. He said: “As an industry, we are doing our best to mitigate risks. All are working on splitting up workloads, re-training staff for different roles, shift work, different product mixes, etc.
“However, we need to plan for the worst-case scenario if something goes down and critical skill absenteeism and transport at peak could be an issue.”
As part of contingency planning, contact your insurance broker to check your policy for uncollected milk
Dr Mike Johnston from the Dairy Council of NI said that resources in the dairy industry are already stretched at this time of year as production reaches its seasonal peak.
Last week, Dale Farm sent a text message to suppliers stating: “As part of contingency planning, contact your insurance broker to check your policy for uncollected milk. There are no issues at present with collections.”
A source in Dale Farm confirmed that it was flagging it up as an option, just in case the worst case happens, and milk can’t be collected.
Insurance cover differs for uncollected milk
Zurich has not confirmed if there is no cover for uncollected milk, but we understand that it is not covered in farm insurance
Dairy farmers all over Ireland have been asking if they are covered by insurance in the event that their co-op can’t or does not collect milk. According to a statement from FBD, there is no cover under farm insurance for milk collection agents and a processor’s inability to collect or process milk supplies. Zurich has not confirmed if there is no cover for uncollected milk, but we understand that it is not covered in farm insurance.
Advisers in NI were very busy in the last few days dealing with queries from dairy farmers
The situation in Northern Ireland is that NFU Mutual does offer cover. The cover was initially set up to cover weather-related issues. The cover can be added on to an existing policy, and is dependent on the size of the bulk tank.
Advisers in NI were very busy in the last few days dealing with queries from dairy farmers. Around half already had the cover, and those in contact have now added it on. There is a seven-day delay from the time you apply and when the cover kicks in.
Cover is to a maximum of £105,000 and individual payment depends on the size of the bulk tank.
Once-a-day milking
Late last week, industry stakeholders had discussions analysing options to flatten the peak milk curve. One of the options discussed was to enforce a two- or three-month period of once-a-day milking throughout the peak milk supply period. DII, which first floated this idea, has since pulled back from the option as a solution.
The overall consensus is that it would cost dairy farmers over €300m in lost sales. Last weekend, Teagasc Moorepark was commissioned to create a report for DII on options available to reduce peak milk.
The agreed consensus following further meetings this week is that reducing feed to 2kg per cow/day over peak and feeding surplus milk to calves were better options.
March milk on par with 2019
March 2020 milk supply is on par or down slightly for the big players when compared to March 2019. Our survey this week of supply estimates show March on par with the same period last year for Dairygold and Lakeland, but down 1% in Glanbia, and down 4% in Kerry. Arrabawn reports that March supply was down 2.2%, while Aurivo reports that supply was up 3.5%. In west Cork, March supply is up between 2% and 4%. CSO stats suggest just shy of 700m litres was collected in March 2019 so our early tally suggests around the same or slightly less milk was collected this year.
Export credits enable foreign buyers of goods to defer payment. For countries like Ireland that export a lot of goods, deferred payment implies credit risk for the exporter, against which they insure themselves, typically with private insurers. Earlier this week, the EU amended the legislation so that insurance can be obtained from public insurers.
ICOS and co-operative organisations from across Europe are jointly calling on DG Agri to act now and activate tools such as private storage aid for butter, skimmed milk powder and cheese.
The Irish Farmers Journal spoke to some of the co-op chairs for views on whether they were asking farmer suppliers to flatten the peak milk curve.
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