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Milk price may have reached it's lowest point for 2019, according to Glanbia chair Martin Keane, but he refused to be drawn on any future milk price.
Milk price prospects were discussed for 15 minutes at the end of the IFA dairy beef meeting in Kilkenny on Tuesday morning.
As New Zealand dairy farmers are now fully into the swing of calving, Fonterra last week predicted a milk price in the order of 30c/l for their season just starting now. This is despite the fact that most New Zealand farmers might have only 10% of their annual supply delivered. Price range
New Zealand farmers are guided about where price is going by Fonterra releasing a price range where they see it for the year ahead. This allows farmers to plan and make changes if necessary.
Speaking in Kilkenny this morning, Glanbia chair Martin Keane said: “Milk price is at the bottom now, but don’t ask me what next year looks like.”
When challenged on the Glanbia model of supporting milk price using dividends from the plc, the Glanbia chair said the model is not for changing.
Targets
He said: “We have lived up to our targets reasonably well over the period, and I don’t think it’s a bad model. It got support from over 92% of Glanbia shareholders in Punchestown and we are not considering modifying the model.”
Keane said the situation for Glanbia this year is they have 8% more milk compared to last year and among other things the EU economy was very flat.
He did suggest that in the last month or two any after effects of the EU skim milk powder stocks seemed to have washed through.
Right track
Reacting to questions and suggestions from the floor that Glanbia are paying down investments too quickly, Keane was firm that they were on the right track.
Keane said: “Depreciating fixed assets in financial accounting is very regulated. Stainless steel costs money. Finding new markets costs money, and we have to stay differentiating ourselves from the pack. We will never win on volume.”
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