The meeting was the first item on the agenda for new president Joe Healy who was elected to the role on Tuesday. He was accompanied by Sean O’Leary, national dairy committee chair, who told the Irish Farmers Journal on Thursday that Glanbia Ingredients Ireland (GII) needs to support dairy farmers at this difficult time by way of paying a stronger base price for milk.
“Glanbia is currently paying one of the lowest base prices for milk in the country,” he said, “which is unacceptable at a time when profits are up and dairy farmers are experiencing one of the worst income crises seen in years”.
GII, which is owned by both Glanbia co-op and Glanbia plc, has cut its March base price by 1.85c/l to 20.9c/l, while the price paid to its members has been cut by 1c/l to 22.75c/l (all excluding VAT).
Even with the member support, the price paid by Glanbia, the largest dairy processor in the country, is below other processors such as Lakeland, which is paying 23.23c/l, and Kerry which is paying 23.81c/l (all excluding VAT).
Pricing model
O’Leary said they also discussed the Glanbia pricing model at the meeting, asking if it was sustainable in the long term.
“The co-op support paid to members comes from the spin-out of shares that farmers own, so effectively farmers are getting their own money back from Glanbia,” he said.
In May 2015, Glanbia co-op reduced its share in the wider Glanbia plc from 41.2% to 36.5%, meaning that the co-op retained €68m from all co-op members to bolster its reserves.
“Glanbia argued back that it is increasing the value of the plc which allows it to pay a higher dividend to farmers,” O’Leary added, “but we’re looking at base milk price here. That needs to be on a par with other processors and GII should be taking a lower margin to support farmers at this time.”
Comment
A spokesperson for Glanbia said that there had been a positive and constructive engagement with IFA at the meeting, with both sides in agreement that the current dairy market is extremely challenging for milk suppliers. The spokesperson said that Glanbia is committed to continuing to support milk suppliers at this difficult time.
He added that the Glanbia delegation highlighted the range of Glanbia initiatives that are benefitting milk suppliers this year. This includes:
At least 1c/l (€21m) of milk price support from Glanbia Co-operative to member suppliers.The recently launched €100m MilkFlex Loan Fund.Glanbia member milk suppliers will receive a special dividend from the co-operative in early May. This is worth €1,100 to the average milk supplier shareholder.Fixed milk price schemes: Glanbia has more milk than ever in fixed milk price schemes, which are paying a base price of around 30c/litre. Read more
New IFA liquid milk chair elected
The meeting was the first item on the agenda for new president Joe Healy who was elected to the role on Tuesday. He was accompanied by Sean O’Leary, national dairy committee chair, who told the Irish Farmers Journal on Thursday that Glanbia Ingredients Ireland (GII) needs to support dairy farmers at this difficult time by way of paying a stronger base price for milk.
“Glanbia is currently paying one of the lowest base prices for milk in the country,” he said, “which is unacceptable at a time when profits are up and dairy farmers are experiencing one of the worst income crises seen in years”.
GII, which is owned by both Glanbia co-op and Glanbia plc, has cut its March base price by 1.85c/l to 20.9c/l, while the price paid to its members has been cut by 1c/l to 22.75c/l (all excluding VAT).
Even with the member support, the price paid by Glanbia, the largest dairy processor in the country, is below other processors such as Lakeland, which is paying 23.23c/l, and Kerry which is paying 23.81c/l (all excluding VAT).
Pricing model
O’Leary said they also discussed the Glanbia pricing model at the meeting, asking if it was sustainable in the long term.
“The co-op support paid to members comes from the spin-out of shares that farmers own, so effectively farmers are getting their own money back from Glanbia,” he said.
In May 2015, Glanbia co-op reduced its share in the wider Glanbia plc from 41.2% to 36.5%, meaning that the co-op retained €68m from all co-op members to bolster its reserves.
“Glanbia argued back that it is increasing the value of the plc which allows it to pay a higher dividend to farmers,” O’Leary added, “but we’re looking at base milk price here. That needs to be on a par with other processors and GII should be taking a lower margin to support farmers at this time.”
Comment
A spokesperson for Glanbia said that there had been a positive and constructive engagement with IFA at the meeting, with both sides in agreement that the current dairy market is extremely challenging for milk suppliers. The spokesperson said that Glanbia is committed to continuing to support milk suppliers at this difficult time.
He added that the Glanbia delegation highlighted the range of Glanbia initiatives that are benefitting milk suppliers this year. This includes:
At least 1c/l (€21m) of milk price support from Glanbia Co-operative to member suppliers.The recently launched €100m MilkFlex Loan Fund.Glanbia member milk suppliers will receive a special dividend from the co-operative in early May. This is worth €1,100 to the average milk supplier shareholder.Fixed milk price schemes: Glanbia has more milk than ever in fixed milk price schemes, which are paying a base price of around 30c/litre. Read more
New IFA liquid milk chair elected
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