Kerry Group milk suppliers will stage a protest in Charleville on Tuesday over what farmers contend is the company’s failure to match the returns available from neighbouring dairy processors.

The decision to protest was prompted by Kerry Group’s move to cut its May milk price by 1c/l to a base of 37c/l, said local supplier Gerald Quain.

In its milk price announcement, Kerry Group stated that the average return to its suppliers for May will be 39.09c/l (including VAT) based on average milk solids.

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However, Quain pointed out that the Kerry Group base is 3c/l below the 40c/l base price being paid by Dairygold for May milk and is 3.6c/l lower than the average return of 42.6c/l that Dairygold suppliers will receive for last month.

Commitment

“That means that if you supplied 100,000 litres to both Kerry and Dairygold, the lads supplying Dairygold are more than €3,500 better off,” he said.

Asked what the protesters will be demanding on Tuesday, Quain said suppliers want Kerry to fulfil its commitment to pay “a leading milk price”.

They are always first out of the pack whenever the milk price is falling

He accused the Kerry Group of “leading from the back”.

“They are always first out of the pack whenever the milk price is falling,” Quain claimed.

The Limerick farmer pointed out that the cost of production is now estimated by Teagasc to be 37c to 38c/l.

“We are losing money at 37c/l and if you are losing money in the lean months of the year, where are you going?” he asked.

“Basically we want Kerry to match the price being paid by Dairygold or the west Cork co-ops. Nobody would complain if they were 1c to 1.5c/l adrift, but 3c/l is too much,” he said.

The protest takes place on Tuesday at 11.30am at the Kerry Group offices in Charleville.

Markets

In its latest communication on milk prices, Kerry Group pointed to the continuing challenges on international dairy markets.

“Global dairy markets continue to struggle, with significant demand uncertainty. This uncertainty is largely attributed to a misalignment of income with inflated prices and rising interest rates, resulting in weakened purchasing power,” the company stated.

The structural transformation of the dairy industry in China is compounding inflationary based demand uncertainty, it claimed.

"The emphasis on domestic milk production and resulting output growth has reduced China’s reliance on global suppliers. Global milk production is still positive, but is currently experiencing a noticeable deceleration,” Kerry Group maintained.

Kerry board

The chair and several members of the Kerry Co-op board will join milk suppliers at the protest.

The “poor” milk price paid by Kerry Group plc to Kerry milk suppliers is the reason for the protest, according to the co-op board.

“Kerry milk price is now 3c/l behind the price being paid by neighbouring processors and is at the bottom of the 2023 milk price league.

“The protesting milk suppliers are calling for the Kerry Group plc milk price to be brought into line with milk processors across the country, who have supported milk price over recent months in the face of weaker returns from the international markets,” Kerry Co-op said.

Kerry Co-op vice chair Conor Creedon said that last week’s price reduction was especially frustrating, as the month of May represents peak milk production when some 16% of milk is produced.

He said that Kerry Co-op is determined to rectify this and Kerry Group plc will have to stand by the leading milk price commitment that it established with the suppliers some years ago.

Kerry Co-op chair Denis Carroll said: “Kerry Group plc needs to empathise more with milk suppliers and maintain its monthly milk price consistent with its commitment to paying the leading milk price.

"Failure to do so monthly only damages the relationship between suppliers and the plc.

“The gap in milk price will have to be compensated for, when the leading milk price commitment is determined.”