‘Farmers across the continent are getting a higher milk price’
Anger building among Glanbia suppliers over milk price – IFA
Milk processors right across the continent are paying a higher price for their farmers’ milk with the three major Irish companies languishing in the ‘relegation zone’ of the European Milk league table, according to ICMSA’s Ger Quain.
Reacting to the latest announcement of the Ornua April PPI increasing to 31.6cpl, ICMSA’s Ger Quain said that the price rise fully vindicated his recent comments in which he expressed the view that the market is in a stronger position than was being reported to farmer-suppliers by their milk purchasers and Co-ops.
Mr Quain noted the speed with which some Co-ops and milk purchasers had reduced their price when the Index fell last month, and he said that ICMSA expected to see the same speed applied to a price rise this month.
“Wholesale markets continue to supply positive trends with the GDT auction increasing once again in its first of two auctions in May.
“The GDT has not yet had a negative auction in 2019, with 11 consecutive positives adjustments.
“European wholesale markets are also suggesting these positive trends with the current Dutch quotations at 31.7cpl for the Butter/SMP mix and almost 35cpl for WMP,” he said.
He said Irish dairy farmers and their representatives are asking why Irish product is not being sold at these prices given that we are told that the “return from the market are below the current prices paid to farmers”.
“The obvious reply to that point is that in the Ornua PPI we have a basket of Irish goods being sold for 31.6cpl and this figure is itself in excess of what some processors are paying their member suppliers”, said Mr Quain
“ICMSA is clearly saying that April milk prices must – at a minimum – meet the PPI or the Co-ops and purchasers will face increasing disillusionment and anger from their farmer-suppliers,” he said.
IFA National Dairy Committee Chairman Tom Phelan said a huge level of anger was building up among Glanbia suppliers over milk price.
He said Glanbia was the only milk purchaser to have cut their pay-out to farmers in both February and March, and was firmly last in the March league.
Feedback from Glanbia farmer meetings and conversations with numerous suppliers clearly show just how dangerously out of touch Glanbia have become as to how important a benchmark milk price is to farmers.
“Glanbia rightly pride themselves in being a leading player in the dairy industry. But farmers supplying Glanbia legitimately expect them to be a leading payer, too. And in this respect, all the farmers I speak to at the moment are bitterly disappointed with the poor Glanbia milk price performance,” Mr Phelan said.
“As a processor of milk, Glanbia Ingredients Ireland takes a margin of 3.2% after tax, the highest in the industry, which has been agreed with farmers to satisfy their lending commitments to fund expansion investment,” he said.
“Glanbia is a complex structure made up of many parts. It is well resourced, as shown by its ability to pay a €14m trading bonus to farmers earlier this spring,” he said.
“However, Glanbia must realise that ultimately, farmers will judge them on the milk price they pay every month. They must convince farmers that their ambition is not just to be a leading player, but also a leading payer,” he said.