Glanbia Under Fire After Milk Price Cuts

IRELAND - Irish Farmers' Association (IFA) President Joe Healy has criticised Glanbia Ingredients Ireland for cutting their base milk price, saying suppliers feel angry and let down.
calendar icon 16 June 2016
clock icon 2 minute read

The company cut prices to 19c/l + VAT – a price which is further topped up for May milk by 2c/l incl VAT from the co-op and another 1c/l incl VAT from the exceptional bonus paid by Ornua. Altogether, the Glanbia May milk payout will be 21.86c/l + VAT or 23c/l incl VAT.

IFA said the cut completely cancels out the 2c benefit of the GAP scheme, in which farmers are essentially borrowing money from the co-op only to repay it later when milk prices recover.

Joe Healy said: “This level of milk price cut, coming just as signs of market improvements are starting to show in earnest, can only be perceived by farmers as cynical in the extreme.

"Glanbia is failing to respond to suppliers’ demands that they would share the pain at a time when farmers can objectively take no more cuts. Yet again, Glanbia dairy farmers are questioning the sustainability and fairness of the GII milk pricing model for farmers.”

IFA National Dairy Committee Chairman Sean O’Leary said: “The reality is that GII has set itself up with the lowest milk purchasing milk price, relying on co-op and other contributions to remain outwardly relatively competitive with mid-league milk purchasers.

"This has implications for milk producers all around the country, at a time when not even the best paying co-ops pay farmers a break-even milk price.

“While fixed milk price contracts have allowed Glanbia farmers to hedge the price of some of their milk, and financial initiatives such as the Glanbia MilkFlex and GAP schemes have been important contributions to supporting farmers through difficult times, none of those things substitute for a viable milk price,” he said.

“Farmers are well aware of just how challenging markets have been, and they are also aware that they have started to turn.

"To quench the kind of anger and disappointment that has been expressed to me over the phone overnight, Glanbia must at the minimum declare clearly that they will maintain their current total payout at least at current level, at least till year-end – with improvements as market return increases justify,” he concluded.

Other Irish milk processors Kerry and Lakeland Dairies also cut their milk prices recently.

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