Annual Report 2009 - Dairygold

Dairygold Co-Operative Society Limited Annual Report and Accounts 2009
The Industry on a
National Scale
The industry debate currently taking place
on the rationalisation of the Irish dairy
processing and commercial sectors remains
an issue for all involved. Dairygold has long
been at the forefront of rationalisation efforts
and indeed was founded out of the merger
of two of Munster’s leading dairy Co-Ops.
This is a never-ending journey and we are
constantly striving for greater efficiencies
and economies of scale.
In this context Dairygold is always open and
willing to explore all relevant and appropriate
options for operational and commercial
improvements and we are currently active
participants in the ICOS ‘Milk Ireland’
discussions. Dairygold has also established
an in-house team to analyse how we might
best progress the ongoing development of
the business to the benefit of Members.
We will not enter into any co-operation or
further co-processing arrangements unless
we are fully convinced that they will deliver
value to Dairygold suppliers in terms of
a higher milk price. Our guiding principle
when seeking efficiency improvements and
cost reductions has always been to pass the
benefit on to our Members and suppliers and
this will remain the case.
Milk Testing
An ICOS initiative to establish a
centralised milk testing laboratory had
the potential to deliver benefits to dairy
farmers throughout Ireland. It was
planned that this facility would provide
testing services for eight Co-Ops with
more than 7,000 milk suppliers.
Dairygold supported the proposal
which unfortunately failed to attract
the industry consensus required
to proceed. While it is unfortunate
that this industry initiative was not
achieved, you can be assured that
Dairygold’s own milk testing facility
continues to operate to the highest
standards.
In addition, the Dairygold milk
testing laboratory is undergoing
an independent accreditation
process which your Board believes
is a necessary enhancement going
forward. It will also be expanded
to cater for extra milk testing and
various disease testing. The inclusion
of disease testing is seen as key to
assisting farmers in their individual
herd health programmes.
Grain
Grain growers had one of the most
challenging years in living memory.
Difficult weather conditions saw yield
significantly down in Ireland and a
collapse in grain prices worldwide.
These and other factors combined
to decimate the profitability of the
enterprise at farm level. Dairygold
offered growers the opportunity to
supply the grain for drying and storage
whilst retaining ownership until sold at
a later date in the expectation of higher
market returns prevailing. Present
indicators are for a challenging year
for growers in 2010 based on trends in
the futures market.
Board and
Management
I would like to note a change to your
Board of Directors. Mr. Terence
O’Donnell retired at the end of the year
by rotational retirement. I would like
to thank Terence for his contribution
and commitment to the Society and
the Board during his tenure and for his
assistance to me over the years.
I would like to formally welcome Mr. Tom
Feeney to the Board and I look forward to
Tom’s contribution and working with him.
I wish to thank the management and staff of
the Society for their work and commitment
over the last year and to place on record
my gratitude for their help and support,
in particular during the periods of change
in the CEO position. I wish to express the
gratitude of the entire Board to Interim
Chief Executive Mr. Michael Harte who took
the reins for six months and guided the
business safely through a difficult period.
On that note I formally congratulate Mr.
Jim Woulfe on his appointment as Chief
Executive of the Society and acknowledge
his commitment and achievements since
taking up office. I wish him all the very best
for the future as he continues in his task
of leading Dairygold through the current
challenging environment.
Conclusion
My Board colleagues and I fully understand
and appreciate the difficult situation
prevailing at farm level resulting from low
produce prices. We have worked through
what has been a most difficult year for all
concerned. We are presently seeing an
improvement in dairy market returns and
are cautiously optimistic for the future.
Whilst many businesses have been
impacted by the recent economic turmoil,
our business is still fundamentally sound
with a strong and united management team
in place.
The Board and management recognise
the future milk processing challenges
and is focused on delivering a sustainable
business performance that will allow
the business develop and grow in order
to return to our producers a strong and
competitive milk and grain price.
I wish to acknowledge and thank you for
your continued support of our Society.
Your custom and business are greatly
appreciated and are vital for the continued
success of the organisation.
Vincent Buckley
Chairman
7