Farm Ireland

Friday 23 February 2018

Kerry insists milk price talks are nearly complete

Declan O'Brien

Declan O'Brien

Kerry Group has insisted that talks with the co-op board on the criteria to evaluate its commitment to pay a leading milk price are close to conclusion.

A spokesman for Kerry rejected suggestions that the talks had been delayed due to differences on how the 'leading milk' would be defined or that talks had resulted in tensions developing between company management and the co-op board.

The Kerry spokesman said "substantial progress" had been made in the negotiations and he predicted that the talks would be concluded in the "near future". But he refused to comment when asked about specific details of package.

Kerry Group gave a commitment to suppliers that it would pay the leading milk price on a "like-for-like" basis as part of a move last year to take Kerry Co-op's share in Kerry Plc below the then 20pc threshold.

The talks on the formula to define the 'leading' milk price commitment have continued since. However, they have attracted greater attention since milk prices started falling this year.

One area of contention has been the fact that Kerry's price has lagged that paid by the West Cork co-ops by 2c/l.

It is understood that Kerry management has claimed that comparing its milk price to that of the West Cork co-ops was unfair.

Kerry officials are understood to have argued that there was a degree of subsidisation of the West Cork milk price by the individual co-ops.

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The issue of the Irish Dairy Board levy (0.14c/l), which is held back by the West Cork co-ops but not by Kerry, is also believed to have arisen. The quality of milk supplies, in terms of SCC levels, has also featured in the talks.

Meanwhile, the Department of Agriculture has indicated that the country is still 1pc over quota at the end of June despite the bad weather.

The news will take many by surprise given that milk yields for the month of June were estimated to be running 7-10pc back on the same period for 2011.

With milk supplies having taken a hit through this month because of the continuing poor weather, the likelihood is that the country should be under quota once the figures are compiled to the end of July.

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