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Independent.ie

Friday 15 December 2017

Dairygold cuts price to 24c/l

The 6pc price cut leaves Dairygold on par with Glanbia at the bottom of the national milk price league.
The 6pc price cut leaves Dairygold on par with Glanbia at the bottom of the national milk price league.
Darragh McCullough

Darragh McCullough

Dairygold is the only major milk processor to cut milk prices for February, with the Cork-based co-op dropping its payment by 1.5c/l to 24c/l, including VAT.

The 6pc price cut leaves it on par with Glanbia at the bottom of the national milk price league. Glanbia suppliers that have signed milk supply agreements continue to receive a 1c/l top-up from the co-op, which has stated that it is putting aside €21m to support milk prices by 1c/l throughout 2016.

In addition, the Glanbia co-op is paying out over €10m in special dividends to suppliers, and offering rebates on feed and grain purchased or supplied during the year.

Glanbia and Dairygold have the largest milk pools in the country, accounting for nearly half of all the milk processed in the Republic.

However, most of the other processors are beating the big two on milk prices so far during this crunch year of weak dairy markets.

Carbery and Lakeland Dairies suppliers continue to put some distance between themselves and the rest. The west Cork outfit held their January price for February at 27c/l, while the Border processor is paying 27.25c/l.

Arrabawn is next in the ranking at 26c/l, while Aurivo are close behind on 25.5c/l.

However, it is the Kerry price of 25c/l that is generating most heat among farmers this week, with suppliers accusing the southwest food giant of not living up to its promise of paying out a "leading milk price".

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The ICMSA's dairy chairman, Gerald Quain, said that there is growing anger amongst Kerry suppliers over a top-up they believe is due to bring Kerry's 2015 price in line with the best in the country, on a like-for-like basis.

The IFA's Sean O'Leary said that he was disappointed that this issue remained "a thorn in the relationship between Kerry and its suppliers" five years on from when the commitment to pay a 'leading milk price' was made.

"The IFA is very clear that there is an absolute onus on Kerry Group and Co-op to verify for farmers that they are paying the leading milk price and to transparently show how it is arrived at," he added.

Meanwhile, Lakeland suppliers are said to be annoyed with "over-the-top" demands laid out in the most recent newsletter.

It stated that cattle should not have any access to any area that the milk lorry needed to use to access the milk tank. The issue is to be raised at this week's board meeting.

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