Glanbia cut its base price by 1.85c/l to 20.9c/l earlier this month, while the price paid to its members has been cut by 1c/l to 22.75c/l (all excluding VAT).
The member price is inclusive of a 1c/l top-up support payment to its members and the advance distribution by GII of a 1c/l “additional cash bonus” from Ornua.
“Farmers are disillusioned with a system that was supposed to apply the co-op ethos to milk purchasing and remove the pressures from the Plc [Glanbia’s grain business],” Healy said.
These top-ups are unsustainable in the long term
“It requires top-ups to pay farmers a price about on par with other co-ops, and these top-ups are unsustainable in the long term.”
Healy said Glanbia needs to “review this situation” and “stop the rot”.
Sean O’Leary, IFA national dairy committee chair, added that farmers are seriously questioning the model pursued by the Irish dairy industry generally, which “ultimately leaves farmers exposed to most of the risk of volatile prices”.
“While our dairy processors and exporters are reporting profits, we need a fair share of margins for the sector to be sustainable.”
In February this year, Glanbia reported a 9% growth in earnings to €310.7m.
O’Leary added that GIanbia’s use of farmers’ resources to subsidise their base milk price will require the spin out of more Plc shares to be sustained for any length of time.
“This is not acceptable to farmers as a viable strategy,” he said.
In May 2015, Glanbia co-op reduced its share in the plc from 41.2% to 36.5%, meaning the co-op retained €68m from all co-op members to bolster its reserves.
Read more
The next steps for the IFA
Glanbia cut its base price by 1.85c/l to 20.9c/l earlier this month, while the price paid to its members has been cut by 1c/l to 22.75c/l (all excluding VAT).
The member price is inclusive of a 1c/l top-up support payment to its members and the advance distribution by GII of a 1c/l “additional cash bonus” from Ornua.
“Farmers are disillusioned with a system that was supposed to apply the co-op ethos to milk purchasing and remove the pressures from the Plc [Glanbia’s grain business],” Healy said.
These top-ups are unsustainable in the long term
“It requires top-ups to pay farmers a price about on par with other co-ops, and these top-ups are unsustainable in the long term.”
Healy said Glanbia needs to “review this situation” and “stop the rot”.
Sean O’Leary, IFA national dairy committee chair, added that farmers are seriously questioning the model pursued by the Irish dairy industry generally, which “ultimately leaves farmers exposed to most of the risk of volatile prices”.
“While our dairy processors and exporters are reporting profits, we need a fair share of margins for the sector to be sustainable.”
In February this year, Glanbia reported a 9% growth in earnings to €310.7m.
O’Leary added that GIanbia’s use of farmers’ resources to subsidise their base milk price will require the spin out of more Plc shares to be sustained for any length of time.
“This is not acceptable to farmers as a viable strategy,” he said.
In May 2015, Glanbia co-op reduced its share in the plc from 41.2% to 36.5%, meaning the co-op retained €68m from all co-op members to bolster its reserves.
Read more
The next steps for the IFA
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