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Glanbia Meetings: a Sign of Milk Cuts to Come?

03 February 2009

IRELAND, UK - IFA National Dairy Committee Chairman Richard Kennedy today said the series of Glanbia meetings currently taking place around the country were being used as a softening up process to drastically cut milk prices.

The series of meetings, in conjunction with Teagasc and ICBF, have already taken place in Abbeyleix, Navan, Clonmel and Dungarvan, with more meetings due this week, and the milk prices being threatened by Glanbia executives would not cover the cost of production.

Richard Kennedy urged Glanbia board members, in these times of recession and falling living costs, to demand that wages be cut, and that the top management lead by example.

"A the recent joint Teagasc/Glanbia meeting in Dungarvan, farmers heard from Teagasc’s dairy research officer Brendan Horan that the cost of producing milk, including labour, on one of the most efficient, and most favourably located farms in Ireland, Curtins Farm in Teagasc Moorepark, was 23c/l," Richard Kennedy said.

"In the last 12 months, milk producers have been hit with price cuts of between 10 and 14c/l, an income loss of between €25,000 and €32,000 over a full year’s supply – and this is before production cost increases are factored in. It is clear that with production costs in excess of 23c/l, even the most efficient suppliers simply cannot afford further milk price cuts," he said.

"Wages in the dairy industry average around €26/hr for a 40 hour week – around €52,000 per annum. For a very efficient dairy farmer to generate a comparable income with an annual production of 455,000 litres (100,000 gals), they would need to receive a net milk price of 35c/l," he said.

"Farmers have taken a significant level of pain in the last 12 months. It is high time that pain was shared, and Board members in Glanbia and all other co-ops, whose dairy farming income Teagasc expects will fall by 30% in 2009, should understand this better than anyone. They must get stuck in and demand a root and branch, ruthless hunt for cost at every level of their society," he added.

"In the current economic context of negative inflation and falling living costs, all private enterprises are having to reduce their wage costs. Glanbia and other co-ops’ board members must insist that farmers have taken more than their share of the market downturn, and demand that wages in their societies are cut, and that the top management lead by example," he concluded.

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