Farm Ireland

Friday 23 February 2018

Glanbia increases August milk price and announces bonus on January to June supplies

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
Ciaran Moran

Ciaran Moran

Glanbia Ireland will pay its milk suppliers 35 cent per litre (cpl) including VAT for August manufacturing milk supplies.

Glanbia Ireland has also announced that it will pay its milk suppliers a 1 cpl bonus on all milk supplied in January to June of 2017.

Glanbia Ireland has increased its base price for August by 1 cpl to 35 cpl including VAT for manufacturing milk at 3.6% butterfat and 3.3% protein.

The Board of Glanbia Ireland today also agreed to pay a 1 cpl including VAT bonus on all milk supplied in January to June of 2017.

It says this very significant bonus on all liquid and manufacturing milk supplies will be included in this month’s milk payment.

Milk volumes allocated to Glanbia’s Fixed Milk Price Schemes will also benefit from the flat 1cpl bonus payment.

Glanbia Ireland Chairman Henry Corbally said: “while the short term outlook remains positive, we note that the current high prices are leading to higher production in key regions and may affect demand when fully passed through the supply chain. Exchange rates, particularly the weakening dollar, may also have an impact on returns in the medium term. The Board will continue to monitor market developments on a monthly basis.”

“As a business majority owned by our farmers, we are always committed to returning the highest possible milk price to our suppliers. We are pleased that the business is in a position to make this very significant payment to our farmers for all milk supplied in the first half of this year.”

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IFA National Dairy Committee Chairman Sean O’Leary has said that a quick look at the most up-to-date available indices of milk returns in Europe suggests that Irish milk prices have some catching up to do. 

He said continued firming in butterfat prices may lead to some further uplift in the August Ornua PPI, and pointed out that August 2017 average EU MMO commodity returns - at just under 36c/l after deduction of 5c/l processing costs - also argued in favour of an Irish August milk price increase of at least 1c/l.

“Most of the indices (see graph below) are strongly supported by the historically high value of butterfat, with EU average butter prices on 3 September coming in at €6390/t – a massive 155% increase compared to its lowest ebb of May 2016,” Mr O’Leary said.

“Strong butterfat value is also sustaining strong WMP and cheese prices, and all the indices have continued to strengthen despite the weaker SMP prices,” he said.

“I urge co-op board members, who will be meeting from this week to decide on their August milk price, to be sure to allow their fellow milk suppliers to fully benefit from the rising dairy returns, with a minimum of 1c/l price increase,” he concluded.

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