Farm Ireland

Monday 20 August 2018

'Farmers should be paid the maximum price for their milk': Anger at co-ops over milk price cuts

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
Gerald Quain, ICMSA
Louise Hogan

Louise Hogan

Sharp differences have emerged between the ICMSA and IFA regarding base milk price cuts announced by Glanbia, Lakeland Dairies and LacPatrick.

Both Glanbia and Lakeland have introduced temporary support measures which maintain returns to farmers for March supplies, but the processors slashed their base prices by 2.5-3c/l.

Glanbia has cut its milk price by 3c/l and moves from 33c/l to 30c/l (including VAT) for March supplies, while Lakeland Dairies has cut its base price from 34.56c/l to 32.06/l - a reduction of 2.5c/l. Glanbia Co-op will pay 3c/l, while Lakeland will pay 2.5c/l support.

Although IFA dairy chairman Tom Phelan commended the Lakeland and Glanbia board members for finding a way to maintain the March milk payout, ICMSA warned that the price cuts will seriously undermine dairy farmer incomes this year.

"In the case of Glanbia, the cuts announced would represent a drop in income of €15,000 in a full year for a 300,000-litre supplier," ICMSA dairy chairman Ger Quain said.

"Farmers are very disappointed that co-ops had not 'held the line' on price given weather-related problems on farms and the likely fall in production occurring in major milk-producing countries due to those weather conditions," Mr Quain contended.

Mr Quain also took issue with the 'special' payments being used to mask price cuts.

While he accepted suppliers wouldn't refuse these payment in the present climate, he said farmers should be paid the maximum price for their milk and not be somehow "strung along" or "kept afloat" by special payments or bonuses awarded at the processors' discretion.

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However, Glanbia chairman Henry Corbally claimed that dairy markets were currently returning approximately 27c/l (including VAT) and "had been for some time".

LacPatrick Dairies said suppliers in the Republic will be paid 30.25c/l, which is down 2.5c/l on February.

"It appears that we are entering the end of the current cycle of downward pressure on prices. We would hope that the very tentative signs of recovery in the markets will be rapid and that we can get back into a more positive position for all our farmers," said chair Andrew McConkey.

Both the IFA and ICMSA called on other processors to hold off imposing cuts.

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