The IFA are seeking an urgent meeting with Glanbia management and other main co-ops to establish their pricing policy for the next period, as farmers are angry over extreme price cuts.

Speaking after an emergency meeting of the National Dairy Committee Chairman Sean O’Leary said members had expressed farmers’ dismay at Glanbia opening the door to extreme price cuts by co-ops. He said that, although markets are weakening, returns for the month of September did not warrant the massive 2 to 3c/l price cuts implemented by some co-ops.

“We need more from our co-ops than monthly price cut announcements. We need to see an industry strategy to provide sustainable milk prices, in which the Irish Dairy Board must play a central role,” O’Leary said.

He said that it is crucial for Brussels to take action to rebalance markets with the Russian ban having a huge impact.

Glanbia

O'Leary added: “Glanbia, who were first off the blocks, were criticised for their extreme 2.5c/l milk price cut unwarranted by September returns. While the top ups used by Glanbia to offset some of the cuts were acknowledged, concerns were expressed about the lack of transparency in pricing they are creating."

He continued: “The Committee was also disappointed that the Glanbia decision has been used by other milk purchasers to apply higher price cuts than planned, or warranted on September milk. The Irish Dairy Board index for September would have justified a VAT inclusive price of 33.9c/l."

Spring

O'Leary said farmers are now worried what the price will be next spring. "Margin is all important, and costs have risen steadily: last year, Teagasc found that production costs averaged at 27.4c/l, a 47% increase since the year 2000.

“The price levels at which Glanbia, Kerry and some of the other milk purchasers will enter the winter are simply too close to production costs to allow farmers make the type of investment needed to fill the processing capacity being newly built or upgraded. Co-ops, in conjunction with the IDB, must provide hedging and other risk management options to help farmers manage the impact of volatility on their income,” he concluded.