‘A milk price in the thirties is a good place for us to be’ – Kerry CEO

A milk price in the thirties is “a good place for us to be“, according to Kerry Group CEO Edmond Scanlon.

The CEO was speaking as he presented the group’s interim management report for the first half of 2018 to the media today (Thursday, August 9) in Dublin.

When asked about milk price prospects, Scanlon said: “I’m probably feeling more optimistic today than I was in February when we were chatting last.

I think a milk price in the thirties is a good place for us to be. There seems to be a bit of stability there at the moment; there seems to be a balance there between supply and demand.

“Generally speaking, we would be fairly optimistic that the milk price would hold up.”

From a Kerry perspective, Scanlon highlighted that it was important to him when he took over the role of CEO in 2017 that the group would do everything it could to try and take as much volatility out of the milk price as possible.

Continuing, he added: “At the end of the day, Kerry Group doesn’t set the milk price; it’s a market-driven event. We are doing everything we possibly can to drive volatility out of it.”

Forward contracts

The group’s CEO feels that Kerry is making progress in this regard and he explained that the group is bringing its farmers “on a journey with respect to forward contracting”.

In recent days, Kerry Agribusiness announced the next offer of its ‘Forward Price Scheme’ facility for suppliers.

Commenting on the development, Scanlon stated: “We had a tremendous response to our first forward contract that we put in place about three months ago and we are just about to open up another forward contract next week.

We expect a big take-up; we had over 600 farmers the first time around and we are expecting a big take-up this time.

He encouraged suppliers to consider the offer and was glad that so many had decided to take advantage of it the first time round.

It is also understood that Kerry is preparing to announce its July milk price in the coming days.

Given the difficulties faced by suppliers in recent months, Scanlon admitted that a support payment is something that the group “will have to look at”.

There is certainly a package of things that we are looking at in terms of different types of supports.

“We have to see how the next couple of months fare out. Certainly, we won’t be found wanting as an organisation to help out our farmers,” he concluded.