Limerick CEO of Dairygold – "Current panacea of joy isn't going to last forever"

Donal O'Regan

Reporter:

Donal O'Regan

Dairygold CEO Jim Woulfe, Ger Bergin, IFA national treasurer; Cllr Noel Gleeson and John Coughlan, Munster chairman of the IFA at Cappamore Show

Dairygold CEO Jim Woulfe, Ger Bergin, IFA national treasurer; Cllr Noel Gleeson and John Coughlan, Munster chairman of the IFA at Cappamore Show

DAIRYGOLD CEO Jim Woulfe joked that he could walk around Cappamore Show unaccosted this year due to the milk price but warned this “current panacea of joy isn’t going to last forever”.

Like many, the Ardagh man was enjoying the show before heading onto Thurles to watch the Limerick U21s take on Galway - a celebration of two things close to his heart, rural life and GAA.

Indeed, it was the Leader who accosted him as he was strolling up to the Dairygold stand and cattle section for a few words.

“Communities and shows are the hallmark of agriculture and rural Ireland. Dairygold is part of the community and you support your community and your shareholders in their own region and locality. And where better than Cappamore where they have a long tradition - this is the 63rd show,” said Mr Woulfe.

Last week, Dairygold announced that it had decided to increase the price for milk supplied in July by 1c/l bringing price to 34.5c/l including 0.5c/l quality bonus and vat.

He describes 2017 as a “good year”.

“It started well. First of all you have better market returns and they have been coming through the peak months which has been very good. So you’re getting milk price increases in the April, May, June, July period, which is when the volume is there so you will have a significantly higher milk price.

“You will have lower costs because fertiliser per unit in our case is back around €70 a tonne on average this year versus last year. So that is good from the input side and as well as that volume is actually up so you will have three factors working together which is good - movement on milk price upwards, more volume and some lower costs so all that is good.

“Of course the most important thing is the weather and the weather has been such an influence this year. We don’t want anything but good weather from here on because the back end of the year prices will be strong, as we see it, right into next year,” said Mr Woulfe.

But while milk prices are above 30 c/l and farmers have a chance to pay off debts incurred over the last few years, he warns that this isn’t happy ever after.

“We are in a cyclical business. You wouldn’t want to take it that this is a panacea of joy and it is going to last forever. I don’t want to be preaching doom and gloom but be very clear - the dairy market is volatile and it will be volatile.

“Even look at butter, the way it has gone in the last 12 months. It is really underpinning the actual price right now. You’re looking at a situation where it is gone up into the six thousands and approaching seven thousand euro a tonne from a price of around €2,500 last year. You see in that situation it is volatile - you have to be cautious,” said Mr Woulfe.

In April, he made people sit up and take notice when he said Brexit was a "sleep disturber" and painted a bleak picture of how it would impact the cheddar cheese sector, in particular, at the launch of the co-operative's annual results.

A few months on - is he still tossing and turning at night?

“Brexit is a still a concern and there is an awful lot of posturing going again. You could draw some more positives recently in the talks about the customs union and the understanding of that - that is coming from the British side.

“The biggest sleepless night you will have about it is the unknown. The British never expected the Brexit election result. They were never prepared for it, it has taken them 12 months to get around it and if they have made a mistake it was exercising Article 50 on March 29 because they weren’t even prepared at that stage.

“There is an awful lot of thinking to be done yet and level of detail to be worked out. The reason, from our point of view, that it would be such a concern is that so much of our product is going into the British market - both cheese and butter. And we have a dependency on it. It isn’t easy to get an alternative market for cheddar, in particular, so it changes the business dynamic.

“It was done so instantly by a vote of 52 to 48, a once-off, and more or less on a mood swing about many other reasons that had nothing to do with it. From the point of view of it being a concern, it is still a concern but drawing more comfort from the fact the way the British are thinking at the moment and putting forward suggestions about ease of border,” said Mr Woulfe.

His panacea, to use his word, is trying to keep it as close to the past as possible.

“That’s what we want,” he said.

Turning to happier matters - the All-Ireland U21 hurling semi-final between Limerick and Galway. And the Dairygold CEO’s prediction was on the money.

“When you are playing Galway, they are always an unknown. Talking to some of the Cork lads yesterday, they said be very wary of Galway.

“Having said that you would expect on the basis of performances of beating Tipperary, beating Clare and beating Cork they are a form team and they know what to expect,” said Mr Woulfe.

Limerick had to dig deep to get over the line but having those matches under their belt was decisive. Not unlike Mr Woulfe, you can’t beat experience when the pressure is on.