Farm Ireland

Thursday 17 January 2019

Farm organisations hit out at Glanbia and Lakeland's May milk prices

Photo Mark Stedman/Photocall Ireland
Photo Mark Stedman/Photocall Ireland
Ciaran Moran

Ciaran Moran

Farmers organisation have reacted angrily following the announcement of May milk prices by both Glanbia Ireland and Lakeland Dairies.

While holding the base milk price, the processors would respectively eliminate and reduce the bonuses paid in April.

Gerald Quain, the Chairperson of ICMSA’s Dairy Committee, has said that extreme anger is being expressed by suppliers to Glanbia after the largest processor in the country announced a price that will leave it still lagging Lakelands by almost three cents per litre on base price a situation that Mr Quain said was “astonishing” although he was also critical of the Lakeland’s decision to cease paying the 1.5 cpl bonus it had paid on April supplies.

“It beggars belief that we are expected to accept that there can be such a disparity between two co-ops processing the same raw product for base price.

“Questions are being asked by ICMSA members who supply Glanbia Ireland about this kind of astonishing price gap; there was a large difference between the top and bottom processors last month for April supplies, but we now see a widening gap between even the middle paying processors and Glanbia Ireland.

“If you consider that up to one quarter of the annual milk supply on a dairy farm is produced in April and May and assuming that we’re talking about something like 100,000 litres for these two months then we’re looking at a difference of €2,780 between a farmer supplying Lakelands and one supplying Glanbia – we think that is a genuinely shocking figure.

“And remember that this difference is becomes even more magnified when the comparison is made with the top-paying Co-ops ”, said Mr Quain.

IFA National Dairy Chairman Tom Phelan said farmers would be disappointed, now that markets had recovered to a point that comfortably supported the full April pay-out.

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He stressed, however, that the move by Lakeland would still leave its pay-out ahead of Glanbia’s.

Tom Phelan called on co-ops that have yet to consider their May milk price to do better for their suppliers and to maintain for May milk the base plus support pay-out they paid for April milk, stressing that output for that month was almost 6pc down. 

He added that all co-ops must now put their best foot forward to leverage the significantly improved market returns to deliver milk price increases for milk supplied from June onwards.

“SMP and butter prices have continued to increase steadily into June, with SMP now reaching €1500/t and butter €5810/t.  WMP prices have also firmed to €2820 while whey powder rose to €760/t.  Only Cheddar cheese has remained static at €3330/t.  Returns for the Irish product mix based on EU MMO early June reports suggest a milk price equivalent of 32.76c/l + VAT (34.53c/l including VAT),” he said.

“I am very clear that these significantly improved prices have started to impact our own co-ops’ returns, and this must make it possible for them to start improving the base milk prices paid to farmers at least from this month on,” Tom Phelan added.

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