Milk processors urged to invest in suppliers as well as 'stainless steel'

Glanbia has invested heavily in new processing facilities in recent years. Photo: Finbarr O'Rourke
Glanbia has invested heavily in new processing facilities in recent years. Photo: Finbarr O'Rourke
Gerald Quain, ICMSA
Claire Fox

Claire Fox

Milk processors have been challenged to 'invest' in their suppliers this spring to the same extent as they have in stainless steel over recent years by holding March milk prices.

IFA dairy chair Tom Phelan said dairy farmers were currently facing "massive challenges to their economic sustainability" and he urged creameries not to repeat February's heavy milk price cuts.

"Co-ops have been lecturing farmers about sustainability: now they must ensure that sustainability is also about the economic viability of dairy farmers," Mr Phelan insisted.

He said an intensive lobby of processor and co-op board members was being undertaken by the IFA to try slow down the pace of price reductions.

Base milk prices for February were cut by between 1c/l and 3c/l as a result of what processors described as challenging marketing conditions. The dairy industry claim market returns equate to a milk price of 28-30c/l.

Returns to farmers are generally around 33-34c/l, although Aurivo paid 35.58c/l for February supplies, with Lakeland Dairies on 34.56c/l.

While the IFA did not single out any processor, the decision by Glanbia to reduce its base price for February by 3c/l - and returns to its suppliers by 2c/l - provoked surprise and anger among many dairy farmers.

"The milk price decisions some co-ops took for February milk have shown just how out of touch they are with the massive challenges to their economic sustainability that suppliers have been experiencing for the last number of months," said Mr Phelan.

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"It is at least as important for co-ops to invest in their suppliers as it is to invest in stainless steel," he maintained.

"Committee members will encourage fellow dairy farmers within their county to join them in meeting or otherwise contacting every board member and some of the members of the outer boards or other co-op committees over the coming days to lobby them and drive home this point.


"Co-ops must slow down and minimise any further milk price adjustment," said Mr Phelan.

"While market returns continue to be challenging in this early part of the season, co-ops need to invest in farmers to help them cope after a horrendously long winter, late spring and a hectic calving season made worse by atrocious weather which left many exhausted and stressed," he added.

His comments come as farmers face higher costs after a tough spring as well as taking a hit on protein levels due to the poor weather conditions.

Figures from the CSO show the milk intake for February was around 279.4 million litres, up 2.4pc on last year.

Ger Quain of ICMSA said processors' focus must be on stabilising milk prices through the next three months.

"The priority right now has got to be getting farmer suppliers through the current weather and fodder issues and that requires a commitment and solidarity from the co-ops and processors that prices will be held and farmers given the financial room to address these other pressing challenges," Mr Quain said.

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