Saturday 1 October 2016

Viewpoint: Milk 'mothership' is operating on a different planet to its suppliers

Published 28/10/2015 | 02:30

Taoiseach Enda Kenny pictured with Jim Bergin CEO Glanbia Ingredients Ireland, and EU Agriculture Commissioner Phil Hogan at the official launch of the Glanbia Ingredients Plant at Belview, Waterford earlier this year.
Taoiseach Enda Kenny pictured with Jim Bergin CEO Glanbia Ingredients Ireland, and EU Agriculture Commissioner Phil Hogan at the official launch of the Glanbia Ingredients Plant at Belview, Waterford earlier this year.

There were plenty of references to 'family', as farmers gathered in Navan last week to vent their anger over the recent 1c/l cut to Glanbia's milk price.

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Yet this 'family gathering' was anything but a pleasant affair as the air of disappointment among lean-of-pocket suppliers spilled over into frustration and disbelief. Many felt quite simply hard done by.

A recent 'bull run' had seen prices increase internationally, and also appear to stabilise in Ireland, until the latest drop in the Global Dairy Trade index. And with other processors holding prices steady, Glanbia suppliers naturally felt that their company would follow suit. Not so.

"We're a mothership for 5,000 suppliers and if we don't keep the mothership together then everyone suffers," Glanbia Ingredients Ireland chief executive Jim Bergin told the IFA gathering in Meath last week.

Liquid milk producer Michael O'Flaherty highlighted the references to the Glanbia 'family', as he urged the processor to "step up to the plate" and support suppliers as they face into the chilly winter months.

"That family needs to start working for us," he said, as Mr Bergin stated he was delivering the "cold reality" which would mean farmers would make different decisions on their on farm spending.

A new shareholder Fintan McCabe told how he feels totally disillusioned after being proud to be part of the dairy giant over the years.

"The standing of a family unit, as it has been described, is how you treat your weakest, and I don't think the weakest has been treated very well," he said, as concerns were raised over some suppliers being unable to buy co-op shares to receive top-ups.

Another supplier warned of the ramifications for liquid milk suppliers .

"We're not working for nothing," said Denis Fagan. "We're not lying down when everyone else in the chain is making money."

Earlier in the day, in the very same room in the Ardboyne Hotel in Navan, farmers gathered for the Teagasc Winter Milk Conference where warnings were issued on the need to batten down the hatches on feed costs for the chilly months that lie ahead.

Teagasc's dairy researcher Joe Patton said in the absence of a "significant liquid premium" the costly winter system sums simply doesn't add up.

He pinpointed a potential shift from winter milking that raises questions for the industry, as the latest figures from the ICBF show 15pc fewer autumn calving cows up to the end of September.

For now, those with cows calving in the autumn are likely to try stick to the plan and milk on. Yet the big question has still to be answered - will farmers put the cows back in calf to deliver this time next year?

Only time, and the vagaries of a volatile marketplace, will tell.

Indo Farming

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