Dale Farm is in the process of revamping its milk collection and haulage services.

The current system employed by NI’s largest milk processor includes a fleet of in-house lorries backed up by three third-party hauliers.

In an effort to streamline milk collection and make the task more cost-effective, Dale Farm put a haulage tender out to its existing hauliers, as well as external transport and logistics companies.

It is understood that one company has produced a framework to manage the logistics of milk collection for the co-op at a much lower cost than Dale Farm is currently incurring.

Sources suggest that the company involved is Bibby Distribution, an English-based transport firm which currently collects in Britain for First Milk. It is interested in taking on the current fleet of tankers and drivers, and managing the collection of milk for Dale Farm. The savings for Dale Farm could be over £1m per year. Discussions are ongoing between Dale Farm, Bibby and existing third-party hauliers to agree on the best course of action to follow for all parties involved.

Indications are that while nothing has been finalised, the co-op would like to see any new agreement on milk collection operating from 1 April to tie in with the start of the new milk year.

Structure

Under its co-op structure, any cost saving would then be included in the milk pricing pool, either as an improved base price or to discount the current milk collection charges incurred by suppliers.

Dale Farm currently has the highest milk collection charges of all processors operating in NI. As outlined in Table 3 of the milk league, a one million-litre supplier on alternate-day collection would have a transport cost of 0.32p/l, almost twice that of the equivalent transport charge for Aurivo, LacPatrick and Glanbia Milk/Fivemiletown.

This puts Dale Farm at a disadvantage on milk pricing, especially when compared with the likes of Lakeland which suspended its charges on alternate-day milk collection from April 2017.

Glanbia Cheese does not charge their suppliers for milk collected daily or on alternate days.

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