Glanbia chair Martin Keane came under pressure this week ahead of a crunch Glanbia board meeting following his comments on milk supply, new entrants and low milk prices to Dutch media as reported by the Irish Farmers Journal.

Farmers were critical of Keane’s comments this week, in which he said Glanbia milk suppliers should expect lower prices than their European counterparts for two reasons. Number one is Glanbia product is sold into commodity markets, and not fresh milk products. Secondly, the Glanbia target of 3.2% profit after tax is more challenging than what is achievable on the continent.

The Glanbia chair is quoted as saying: “Our product mix determines our milk price. We do not have a large consumer market behind us, which pays a lot better than the commodity market for which we produce. Over 90% must leave the island, which leads to additional costs.

“We aim for 3.2% profit after taxes. That is far more challenging than on the continent and puts pressure on the milk price compared to our competitors. These extra costs ensure that we always have to pay several cents per kilogramme less, but we can explain that perfectly. Our farmers have lower costs due to the seasonal milk production system.”

Keane backtracked on his comments this week, saying that “the article as published does not reflect the views of the board of Glanbia Ireland. I regret any misleading impressions that may have been created as a result.

“I wish to be very clear - the board of Glanbia Ireland has not made any decision on the organisation’s future policy regarding growth milk. This growth milk opportunity is currently being evaluated by the Board and will be communicated to suppliers as soon as it is agreed.”

As expected milk price came up at the Glanbia council meeting on Wednesday. We understand Glanbia management backed Glanbia milk price to perform well when looked at on an annual basis for 2019.

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Glanbia’s Keane talks down milk price and supply