Farm Ireland
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Saturday 21 July 2018

Co-ops under fire for holding milk prices

Glanbia Ireland has a 2.4 billion litre milk pool from 4,800 suppliers
Glanbia Ireland has a 2.4 billion litre milk pool from 4,800 suppliers
Lakeland Dairies

Irish dairy processors have been accused of "enhancing their own margins at the expense of their suppliers".

A number of co-ops have held their August milk price for September, a move that has been criticised by ICMSA.

ICMSA Dairy Chairman Ger Quain said the decision by Kerry and Glanbia represented a deliberate choice "to enhance their own margins at the expense of their farmer-suppliers".

Dairygold Board decided to hold the price for milk supplied in September at 36c/L including 0.5c/L quality bonus and Vat.

Mr Quain accepted that dairy markets had weakened in recent weeks, but he claimed the full benefits of the market improvements had not worked their way back to farmers.

"Farmers will clearly point to the investment in value added over the last number of years made by these two processors and, indeed, their own investment at farm level -including in SDAS - and they will ask the very simple question: why is their milk price still below the average EU milk price and not far ahead of the Fonterra price, which is broadly based on commodity-type products?" he said.

Disadvantage

The IFA also expressed disappointment with the decision of Kerry and Glanbia to hold milk prices and they called on processors to deliver a 1c/l increase for September.

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"At a time when our European fellow dairy farmers have received increased September milk prices and further uplifts have been announced for October milk, it is crucial that dairy co-ops in Ireland would not leave their suppliers at a disadvantage," said IFA dairy chairman Sean O'Leary.

Lakeland Dairies kept its base price, but has added a 1c/L Butter Bonus for all milk supplied including all fixed price contracts. With this bonus for September, it takes the Lakeland payment to a gross 36.5c/L including VAT.

However, Lakelands has cautioned that the outlook for 2018 is not as positive for milk prices.

"Unfortunately butter prices have passed peak and are now much weaker as we face into 2018, and powder prices are returning less than intervention," the co-operative warned.

Some co-ops are 'enhancing their margins' at farmers' expense, claim ICMSA

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