PPI rebounds in December
Ornua's dairy price index has recovered much of the ground lost in previous months as processors prepare to set milk prices.

Ornua's purchase price index (PPI) stands at 107.5 for December. This is equivalent to a farmgate price of 30.55c/l excluding VAT, assuming 6.5c/l processing costs.

The index increased by 2.4% last month, reverting most of the losses suffered in the two previous months.

"The December 2018 Index reflects improved spot and powder returns, off-setting lower butter and cheese prices," an Ornua spokesperson said.

Co-ops are preparing to set December milk prices from this week. IFA dairy chair Tom Phelan urged all co-op board members to end what has been a very difficult year for dairy farmers by holding the December price.

Current dairy market trends do justify cautious optimism at least

“Between the last week in December and the first week in January, Dutch spot raw milk prices have increased from just 29c/kg to 33.5c/kg, according to EU Milk Market Observatory reports. "Dutch spot SMP prices have lifted to near €1,800/t. In the first trade of the year, the new European EEX raw [liquid] milk futures saw a milk price equivalent of 35.05c/kg achieved for milk delivered in January [for product to be traded in March 2019],” Phelan said.

He added that production forecasts in the main European dairy producing countries remain down.

“There are real international geopolitical concerns in the year ahead, but current dairy market trends do justify cautious optimism at least," he said.

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.

Glanbia Ireland planning €140m cheese facility for Kilkenny
A new continental cheese facility is planned for Belview in Kilkenny and will have the capacity to process 450m litres of milk.

Glanbia Ireland and a Dutch Company, Royal A-Ware, plan to build a new continental cheese facility in Belview, Co Kilkenny, with €140m to be invested.

The new facility is scheduled to be commissioned in 2022 and will have a production capacity of 450m litres of milk annually. There will be 80 full-time jobs created in the new facility, along with 100 jobs in the construction phase.

The proposed new facility will be located at a greenfield site near to Glanbia Ireland’s infant nutrition plant.

Milk from Irish dairy farms will be processed into various forms of continental cheeses at the plant.

Diversification

Jim Bergin, chief executive of Glanbia Ireland commented: “This new partnership will create a new route to market for Glanbia Ireland's suppliers’ milk and diversify our portfolio of consumer dairy products and ingredients.

“Since 2014 we have invested €343m to facilitate a 42% increase in milk production by Glanbia farmers. This proposed new investment is now required to diversify our product mix and to ensure that our suppliers have the opportunity to fulfil their growth ambitions.”

The announcement was welcomed by both the Minister for Business Heather Humphreys and the Minister for Agriculture Michael Creed.

Regional development

Minister Humphreys said the creation of jobs is a key focus for the government especially with the looming threat of Brexit. She added that the creation of jobs through product diversification would create quality and sustainable jobs for the area.

Minister Creed also mentioned Brexit, saying the creation of facilities such as the one envisaged for Belview were a critical response in terms of developing new products and new markets.

Royal A-Ware CEO Jan Anker said the investment would give their company access to “additional volumes of high-quality cheese through a local supply chain”.

Read more

Glanbia launches Truly Grass Fed cheese in the US

Lakeland and Glanbia hold December milk prices

Fast-track visas not in time for calving
It could take six months for workers to gain full approval, meaning much-needed dairy labour won't get here for the peak spring-calving season.

The Government’s fast-track visa application system for farm workers is not likely to deliver people in time for the busy spring period on farms.

Farm Solutions Ltd, the southeast-based farm labour recruitment company, is concerned that it could take up to six months for full approval to be gained, twice the hoped-for 12 weeks.

“Having gained trusted partner status in November, we are investing resources to get suitable candidates.

They must have not just dairy skills, but also language skills and ability to take responsibility,” explained Joe Rowe, managing director of Farm Solutions.

“There is competition in the marketplace for such skilled workers.

"New Zealand and Saudi Arabia can process applications and visas within two months, candidates we have lined up could be poached away.

"The €1,000 fee per candidate is significant, but the 50 permit limit for farm workers is more likely to be a limiting factor and we hope that can be revised upwards.

"It’s a significant commitment to seek labour in countries like the Philippines.”