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Thursday 18 October 2018

Farmers ‘furious’ over Glanbia’s milk price cut

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

Declan O’Brien

The IFA has sharply criticised Glanbia Ireland for trailing behind the country’s other leading dairy processors in terms of milk price.

IFA president, Joe Healy, called on Glanbia Ireland to explain to farmers why, as Ireland’s largest milk processor with a diverse product mix, it is not paying a top price in peak production months. 

Returns to Glanbia suppliers were cut by 1c/l for May milk, with the processor on a base of 29c/l including VAT, and Glanbia Co-op paying a further 1c/l top-up.

However, Glanbia’s 30c/l overall milk price is trailing returns from the other major processors. Lakeland Dairies is paying 31.78c/l, Kerry Group is on 31c/l, while Aurivo suppliers are getting 30.5c/l.

Earlier this week, he West Cork Co-ops had not set their May milk prices, but they are expected to be around 33c/l.

Mr Healy accused Glanbia of making a bad call on its May milk price and he described the response from suppliers to the company’s decision as one of “justifiable anger”. 

“Glanbia now needs to quickly start on the path of price recovery, and outline to farmers how they will increase their milk prices from June onwards,” Mr Healy maintained.

IFA dairy chairman Tom Phelan, who is a Glanbia supplier, claimed that the company’s dairy farmers were furious.

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“My fellow Glanbia suppliers simply cannot understand why the business they were so proud of having set up as the largest, best invested and most innovative is letting them down on milk prices,” Mr Phelan said.

Gerald Quain of ICMSA said that the disparity between the prices paid by processors for May milk, the peak milk production month, continued to be a major issue and source of anger for farmers in lower-paying dairies.

He accused some processors of being up to 3c/l adrift of the market price for milk, based on the Ornua PPI index which rose five points this month to 105.4.

“ICMSA has consistently pointed out that certainly for the last three months, the Ornua PPI indicated a higher price than the processors were paying their farmer suppliers,” Mr Quain said.

“The PPI translates directly across to 31.4c/l for May and that is the benchmark that we would draw attention to now: who’s at that mark, who’s ‘north’ of it and who’s ‘south’ of that price,” the ICMSA dairy chairman said. 

“The fact that some farmers are receiving thousands of euro less for their April and May supplies than their counterparts supplying other processors, is simply not sustainable,” Mr Quain contended.

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