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Sunday 21 October 2018

Milk processors under fire for failing to match Ornua returns

Tom Phelan of IFA said the price decisions taken by Glanbia, Lakelands and Kerry Group had
Tom Phelan of IFA said the price decisions taken by Glanbia, Lakelands and Kerry Group had "disappointed farmers". Stock image
Declan O'Brien

Declan O'Brien

Farm organisations have hit out at dairy processors for not matching Ornua's increased returns for August milk.

Both Lakeland Dairies and Glanbia have held farmgate prices for August milk at 32.78c/l and 32c/l respectively.

Kerry also held at 32c/l for August supplies, while Aurivo increased its price by 0.5c/l to 32c/l.

However, the ICMSA and IFA pointed out that Ornua's PPI index had increased from 107.3 in July to 111.1 for August, with the latter level equating to a return of 33.5c/l.

Ger Quain of ICMSA described the disparity between the return processors were getting from Ornua and the price they were paying their farmer suppliers as "significant and inexplicable".

"Farmers are entitled to ask what's going on here. How is it possible that a processor can just pocket the increase it's receiving from Ornua and not pass that better price back to its own suppliers?" Mr Quain said.

"Farmers have every right to insist that they are paid at least what their co-op was paid and that is the absolute minimum that's going to be acceptable," he added.

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While noting the price increase announced by Aurivo, Tom Phelan of IFA said the price decisions taken by Glanbia, Lakelands and Kerry Group had "disappointed farmers".

He urged other co-ops that have yet to decide on their August milk price to better reflect those improved returns with a base price increase of at least 1c/l, at a time when farmers will need every bit of available cash to keep cows fed.

"Firmer market prices look set to persist over the coming months as earlier weather events continue to influence European volumes. Co-ops will have scope to increase milk prices even further, and they must commit to doing so to ensure farmers can optimise the cash flow they need to buy feed and fodder to keep milk volumes flowing," Mr Phelan maintained.

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