Kerry co-op to offer cash for shares
Members of the €2.2bn Kerry co-op can swap out their co-op shares for cash

Kerry co-op is to offer an opportunity for members to cash in their shares. A board meetingon Wednesday approved the proposal to offer an cash out opportunity later this year, with subsequent opportunities to follow in future years.

Kerry co-op owns 13.7% of the shareholding in Kerry Group, worth over €2.2bn. The average shareholding among Kerry co-op's 13,267 shareholders is thus valued at approximately €167,000. The money paid out to shareholders will be regarded as income and subject to income tax.

Business purchase

The board are also intent on exploring the option of purchasing the agribusiness from Kerry Group plc. Negotiations between the two sides will now be required, as no indicative price or valuation model is contained in the optional clause set out in the contract between the two entities.

Current relations between the co-op and the plc are at a low ebb, following the prolonged row over bonus payments. The arbitration process to resolve that issue has been completed, with both sides awaiting a ruling.

The Irish Farmers Journal understands that the Kerry co-op share register is still administered by Kerry Group, so their involvement in the upcoming process will be required.

Watch: farmers star in new Kerrygold ads
A marketing campaign targeting 36m customers worldwide is centred on the daily life of three Irish farming families.

Ornua is launching a new global digital marketing campaign to promote the Kerrygold brand based on videos filmed on three Irish farms.

2018 Quality Milk Awards winner Darran McKenna from Co Monaghan; Marguerite and Michael Crowley from west Cork, also a Quality Milk Awards finalist farm; and Brian Cleary from Co Waterford feature along with their families and herds in the series of adverts.

The videos show lights being switched on early in the darkness as dairy farmers go about their work "364.5 days a year", as Brian Cleary puts it.

The campaign emphasises the family tradition on Irish farms, with three generations appearing – including a photograph of Michael Crowley's late father in the parlour.

Michael said that his children were very much part of the farm. "When I ask who wants to be the farmer in the future, I have three hands going up," he said.

The campaign will run in Ireland and in Kerrygold's largest export destinations in Germany, the US and the UK, but also in developing markets for the brand such as Poland, Greece and France, Ornua Foods managing director Róisín Hennerty told the Irish Farmers Journal. The target audience is 36m people.

The videos will appear on social media channels such as YouTube, Instagram and Facebook, but not on TV.

"We're meeting the consumers where they live and play: they are on social media when they are looking for a recipe or on their lunch break," said Hennerty.

Running the campaign on social media will also be more economical – though its budget is confidential.

PPI holds steady as further SMP stocks cleared
The Ornua PPI has remained steady this month while the European Commission has further emptied intervention stocks with all Irish powder now sold.

The Ornua Purchase Price Index (PPI) has remained almost unchanged into the first month of 2019, moving up marginally by 0.1 to 107.6.

This equivalent to a farmgate price of 30.6c/l (excl VAT and assuming 6.5c/l processing costs).

Intervention sale

Meanwhile, the European Commission has further emptied skim milk powder (SMP) intervention stores with 584t sold in the latest tender.

This leaves just half a percent of peak intervention stock in store, with the vast amount of that now in Spain. All Irish SMP intervention stocks have been cleared.

The minimum price secured at the tender also increased up from €1,585/t last month to €1,622/t which reflects a recovering global dairy protein markets.

Conor Mulvihill, director of Dairy Industry Ireland (DII) welcomed the clearance of intervention stock by the EU in an orderly manner.

He said that the almost 400,000t of stock had served as an albatross around the neck of the global dairy protein market.

However, Mulvihill warned that despite the optimism, current intervention disposal prices only equated to a milk equivalent price of under 20c/litre.

This, he said, meant the market had some way to go in terms of delivering proper returns for Irish farmers and industry.

Read more

Over 80,000t of SMP sold from intervention

PPI rebounds in December

Kerry co-op offers cash for shares
Members of the €2.2bn Kerry co-op can swap out their co-op shares for cash. Shares have a see-through value of over €500.

Kerry co-op is to offer an opportunity for members to cash in shares later this year. The Equity Redemption Scheme will be voluntary, with the option to sell some or all shares and is open to all shareholders.

The money paid out to shareholders will be regarded as income and subject to income tax. The co-op owns 6.11 plc shares for each co-op of the existing 3.9m co-op shares. This gives a potential see-through value of €556 for each co-op share. The co-op will determine the multiplier it will use for each co-op share depending on “the costs associated with the scheme”. Kerry co-op owns 13.7% of the shareholding in Kerry Group, worth over €2.2bn. The average shareholding among Kerry co-op’s 13,267 shareholders is about €167,000.