The CEO of the newly rebranded dairy processor Kinisla - previously known as Kerry Dairy Ireland - has said that global volatility is likely to lead to a challenging year for dairy farmers.

Pat Murphy said that the international dairy market situation "have been very volatile over the last few months".

He told Agriland: "I think that it will be challenging I'd say for the next few months... I mean the cost of production at farm level today is up at 44, 45 [cent per litre] we're hearing, so it's going to be a difficult few months for dairy farmers," Murphy said.

The CEO of Kinisla spoke to Agriland in advance of the official launch of the business' new corporate identity today (Monday, May 18).

The new identity was unveiled today at an event in Listowel, Co. Kerry, attended by Taoiseach Micheál Martin; Minister for Agriculture, Food and the Marine Martin Heydon; Minister for Children, Disability and Equality (and Kerry TD) Norma Foley; and several other public representatives, along with a number of milk suppliers, employees and customers.

The announcement of the new name comes as the business published its preliminary performance for 2025, and announced an investment programme for the next five years to the tune of €300 million.

Looking at the likely direction of travel for milk prices and farmer margins for 2026, Murphy said: "The volatility we've seen because of issues in the Middle East isn't helping anything. Fertiliser prices are going to be high for the coming months... Energy prices for the factories have gone up significantly in the last three or four months and even since the Ukraine war, that's been well up compared to what it was before that.

"So we have challenges coming at us, but we are going to support our farmers over the coming months, we are going to make sure that we pay the maximum milk price at all possible, but it will be a challenging year I would say for dairy farmers this year," he added.

Despite the negative outlook, Murphy noted that "as prices come down the last few months, the last six months, prices can go back up again very quickly".

Pointing out some signs of positivity, he said: "We can see the protein demand across the world. Today...whey powder prices are as high as they've ever been in the history of whey powder prices."

"So there are certain elements of the dairy portfolio that we all make in the country that are doing very well," the Kinisla CEO added, citing milk and whey protein as products performing solidly at present.

However, the key mainstays of dairy production are going through a tough period.

"Unfortunately, things like cheddar cheese is struggling at the moment, butter is kind of struggling...it has seen a rapid decline," Murphy said.

"So I think over the next few months it's going to be a little bit challenging but we are here to support our farmers and to pay the maximum milk price that we can, to try and help them through this very turbulent period," the Kinisla CEO added.