Dale Farm on profitable growth trajectory

Dale Farm is well on track to achieve a 3% operating profit over the next two years, according to Group CEO Nick Whelan.

The farmer-owned co-op is currently turning over £500 milion from an 850 million litre milk pool.

“All our manufacturing sites are now working at full capacity throughout the year,” Whelan said.

So, in realty, we need very little extra milk to keep our operation working at optimal efficiency.

Whelan made these comments while hosting a visit by members of the Guild of Agricultural Journalists to the Dale Farm plant at Dunmanbridge in Co. Tyrone earlier this week.

He continued: “Paying the best possible price to our farmers is the key driver of the business. And we are succeeding in doing this.

From an operational point of view, our objectives are to take cost out of the business, develop a branded future for Dale Farm, pay down our debt and create a working atmosphere that gets the very best from our staff.

Whelan said that the group’s growing range of products is giving a good balance to the business in terms of the returns it receives form the market place.

“We are committed to adding value to the milk produced by our farmer-members. And, in practical terms, this means developing new brands.

“Up to now the management at Dale Farm would have thought nothing of investing in new processing capacity and stainless steel.

Now we need to adopt the same mindset when it comes to developing new brands. Investments of this nature may well a require a three-year payback. But if we get it right, it’s an investment worth making.

Cheese is the big driver for Dale Farm. The plant at Dunmanbridge manufactures 55,000t of cheese on an annual basis. All of this is sold in either sliced or grated form to customers throughout the UK and Europe.

“It takes nine months for fresh milk to be processed into cheese and then sold on to retail customers,” said Whelan.

“This means that milk coming into Dunmanbridge during the first week of April 2019 will not see the light of day as cheese until the early months of 2020. I don’t know what price cheese will be making on the open market at that time.

“So we are working with our retail customers on pricing schemes that reflect our costs in a meaningful way. In turn, this is helping to take the volatility out of the cheese making process.”