Farm Ireland

Tuesday 24 October 2017

Glanbia holds June milk price

Darragh McCullough

Darragh McCullough

Thousands of dairy farmers are breathing a sigh of relief this week with the news that Glanbia are to hold their June milk price.

After two consecutive cuts of 3c/l and 2.5c/l, suppliers were fearful of a repeat of 2009 when prices fell off a cliff.

The move by the country's biggest processor will also put pressure on the other co-ops to hold their June prices when they meet over the coming weeks.

Glanbia had emphasised the impact of the bad weather on production costs as one of the reasons to hold prices, but the IFA claimed that recovering commodity prices were an important factor.

"Quotes for butter from the main European trading agencies for this week are up another €50/t, while quotes for SMP are up by €30-50/t. Further weakening of the euro against Sterling has also boosted returns from cheddar and whey powder," said the IFA's dairy chairman Kevin Kiersey, who estimates that these lifts were worth an extra 3c/l during the month of June.

Meanwhile, milk quota rules are set to be tightened yet again in an effort to stem the flow of milk out of the west and north into intensive dairying areas further south.

Currently, farmers from anywhere in the country are able to form corporations into which they are entitled to lease their quota.

It is believed that some farmers seeking to retire from dairying have taken advantage of this arrangement to lease quota into corporate entities that subsequently operated in other co-op catchment areas.

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Following consultations with the milk quota review group, the Department of Agriculture is drafting up new rules to prevent more than one farmer forming a corporation, and in the process, eliminate the possibility of arrangements between farmers in separate quota catchment areas.

However, farmers who incorporate their businesses will still be able to enter into partnerships with other farmers or incorporated farm businesses.

Existing partnership rules already stipulate that farmers must be within 100km of each other in order to qualify for a partnership arrangement.

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