Glanbia has announced a 2c/L price cut for March milk supplies, a move it has called 'regrettable'.
It announced to suppliers today that it will pay its member milk suppliers 29.42c/L (inc VAT) for March creamery milk supplies at 3.6% butterfat and 3.3% protein.
Glanbia Ireland (GI) will pay a base milk price for March of 29 cpl (including VAT) for creamery milk at 3.6% fat and 3.3% protein. This is a reduction of 2c/L from the February base price.
It also announced today farmer members will also receive a 0.42c/L (including VAT) payment from Glanbia Co-op on all milk supplied this month as their ‘Share of GI Profit’.
"This regrettable milk price reduction is required due to the negative impact of the Coronavirus (Covid-19) pandemic on dairy markets," it said in a statement.
"Restrictions brought in to help contain Covid-19 have decimated foodservice demand in multiple countries and severely challenged the dairy supply chain."
It also said that while some dairy market sectors including domestic retail remain stable, returns for the overall basket of dairy products is adversely affected.
Customers directly or indirectly serving the leisure and foodservice sectors have cut order volumes until they have visibility on the re-opening of their markets, it said.
Glanbia Chairman Martin Keane said: “The Coronavirus outbreak has caused significant challenges for all our communities and our businesses. We regret that a farm gate milk price reduction is required, but it is essential given the sharp drop in average returns from the market for our basket of products.
It comes after Lakeland Dairies cut its milk price last week.
In the Republic of Ireland, a price of 30c/L (including VAT and Lactose bonus) will be paid for milk supplied in March. This represents a reduction of 1.81c/L on the February base price.
In Northern Ireland, a base price of 23.75p/L will be paid for March milk. This is a reduction of 1.5p/L on the February price.
Commenting on the price, Lakeland Dairies said the fallout from the COVID-19 is having a dramatic impact on the dairy markets.
“As the CO¬VID-19 pandemic has continued across the globe the global dairy markets have collapsed.
“The food service sector across Europe has suffered near wipe-out following the closure of restaurants, cafes, hotels, while airlines have grounded many planes. Food service is an important route to market for Lakeland Dairies and many dairy processors across Europe.
“Prices for butters, powders and cheeses are under significant down¬ward pressure as food service milk is now flooding into powders and butter."