Dutch help dairy farmers find Holy Grail in Lakeland

A large factory to be built in Cumbria for commodity cheddar cheese has been claimed as a model for future farmer controlled companies (FCCs) -- squaring the circle of selling a competitively-priced product while paying higher farm gate milk prices.

Last month Partners in Cheese (PiC), a consortium of Dutch dairy firms, gained planning permission for the £44m, 400m litre/year Lakeland Dairy Park at Workington. So far, 100 local dairy farmers have committed 150m litres of milk a year to the venture and over half of Lakeland's shares are expected to be placed with producers. A meeting with prospective farmer suppliers and investors was scheduled for this week.

Meanwhile, the Dairy Farmers of Britain (DFB) co-op has just bought the dairy business of Lincolnshire Co-operative. Last August DFB claimed that its purchase of Associated Co-operative Creameries (ACC) made it the UK's largest integrated UK dairy co-op and the third largest milk processor. DFB sells about 2m litres of milk a year from 3,250 member farms.

Lincolnshire has a Lincoln dairy and eight depots with a £23m turnover. It produces 50m litres of liquid milk a year and ice-cream.

PiC said that no other processor was interested in commodity cheese, which accounts for 90% of cheese demand. "There is a need for more efficient [commodity] cheddar capacity -- large scale, high volume and low cost," said the md Ronald Akkerman. He added that the project would not go the way of failed FCCs such as United Milk's Westbury dairy and the Amelca plant in Derbyshire, because of its proven Continental approach.

PiC claimed to have two "interested" potential customers, but construction of the plant by Clegg Food Projects would not begin until basic sales commitments had been secured. The plant would use 250m litres of milk a year, rising to 400m litres within two years.