Ill Timed Milk Cut Slashes Producers Margins

IRELAND - A decision by Ireland's largest milk producer, Glanbia, to cut milk prices has come under scrutiny by the Irish Farmers' Association (IFA), who say it is an unacceptable pre-judgement of markets at a time when trends are actually positive.
calendar icon 18 June 2008
clock icon 2 minute read

IFA National Dairy Committee Chairman Richard Kennedy said Glanbia’s decision to cut its milk price by 1.5c/l in May, and by another 1.5c/l in June, was an abuse of its position as the largest milk purchaser.

Richard Kennedy said Glanbia’s decision, which will bring their total price cut announced to date to just under 7c/l, was in very stark contrast with the last week’s move by Carbery Milk Products, who held milk prices for the rest of the year after April and May cuts totalling 6c/l.

"Glanbia are short-changing not just their suppliers, but every dairy farmer in the country. "
IFA National Dairy Committee Chairman Richard Kennedy

He added that suppliers were rightly furious at the Glanbia move, and urged the Glanbia Board members to urgently rescind at least the June cut.

“Yet again, Glanbia, the most efficient, largest, least commodity–dependent milk purchaser in Ireland, are determined to knock back milk prices at producers’ expense, even pre-judging June milk prices against positive market trends!” he said.

“Every time I meet with Glanbia management and board members, they remind me just how many millions they have invested over the years to improve their efficiency, their scale and reduce their exposure to lower-returning commodities. Yet, last Friday, they have cut the price just as drastically as the co-ops which are totally dependent on basic commodities, in the process seeking yet again to lead prices down for the month of June,” he added.

“Glanbia are short-changing not just their suppliers, but every dairy farmer in the country. Their much trumpeted plans for expansion and development sound hollow when they are clearly trying to lead all other co-op prices down at a time when dairy markets are rising again,” he said.

“Over the last number of weeks, there is not one board member of Glanbia who has not met, talked with or been contacted by National Dairy Committee members and other IFA milk supplier members. This decision is a kick in the teeth to all dairy farmers,” he said.

“I note that a Board meeting is due at the end of the month. I would urge Glanbia board members to use the coming days to take the temperature among their milk supplier shareholders. Market prices for most dairy products are rising, and they have made the wrong decision. They must rescind at least the June price cut,” he concluded.

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