Farm Ireland
Independent.ie

Saturday 25 March 2017

See how many Irish processors pay above the average European milk price

The top price was paid by an Italian processor.
The top price was paid by an Italian processor.

Irish milk prices for August remain more than 1c/l below the average available from a selection of Europe's top processors but were ahead of the returns paid by major companies such as Arla and Friesland-Campina.

The review of August milk prices (VAT exclusive) found that Kerry Group, Dairygold and Glanbia were placed sixth, seventh and 13th respectively in a basket of 15 of Europe's leading milk processors.

Top price of 36.35c/l was paid by Italian processor Granarolo (North), while French company Danone (Pas de Calais) came in second at 30.98c/l. The survey's third-placed price of 30.41c/l was paid by another French dairy concern, Sodiaal (Pas de Calais).

Denmark's Arla Foods was placed 10th at 24.51c/l, while Dutch co-op Friesland-Campina at 24.24c/l was 11th.

Kerry was on 25.34c/l, while Dairygold was on 25.04c/l, with Glanbia on 23c/l. The Glanbia price did not include the 2c/l top-up that is paid by Glanbia Co-op to society members. The average milk price for the 15 processors included in the review was 26.19c/l.

The survey was undertaken by LTO Nederland, the Dutch Federation of Agriculture and Horticulture. The prices are VAT exclusive and for supplies in excess of 500,000kgs per year, at 4.2pc fat and 3.4pc protein.

Responding to the LTO findings, a spokesman for Glanbia said it did not compare "like with like" as it excluded the company's fixed price milk scheme, the Glanbia Co-op support payment and premiums paid on liquid milk.

European Milk Price (August C/L, VAT Exclusive)


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Source: LTO Nederland – prices cents per litre and for suppliesin excess of 500,000kgs per year, at 4.2pc fat and 3.4pc protein, TBC 24,999 and SCC 249,999 per ml

Product mix

The Glanbia representative also pointed out that the seasonal nature of Irish production and the absence of a large domestic market impacted on the product mix that could be developed and therefore returned to farmers. A spokesman for Kerry Group pointed out that the LTO survey reflected a high-cost European dairy production model.

"Kerry does not have access to the fresh dairy markets in mainland Europe which return relatively higher milk prices but require milk production 365 days of the year," he said.

"This model incurs significantly higher input costs at farm level. Our model is a grass-based one with no winter milk bonuses - but no milk collection fees either. Our focus is on supporting sustainable, least-cost, milk production systems," he added.

However, ICMSA dairy committee chairperson, Gerald Quain, said farmers' attention would focus on what he called "the very concerning gap" that still existed between all three of the Irish processors featured and the average price per litre given by the table.

Mr Quain described the 3c/l price differential between Glanbia and average as "astonishing," given the income pressures facing dairy farmers.

Indo Farming