Glanbia and Lakeland Dairies have short-changed their farmer-suppliers, courtesy of the price they paid for May milk, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).
Dairy Committee Chairman Gerald Quain said that although international markets were strong enough to deliver a producer price of 33c/L, farmers actually received a base of 32c/L.
“Irish processors have consistently paid prices below those that have been on offer in other EU countries, the United States and New Zealand, over the last number of months.
The co-ops actually had the reserves to pay farmers a 33c/L price in May.
Quain said that May is, in reality, a five-week supply month for dairy farmers.
“It is also the month of peak milk output on almost every dairy farm. Our calculations show that individual farmers have lost out to the tune of €450, given the decisions taken by Glanbia and Lakeland over recent days.”
That figure was based on an average farm milk pool of 300,000L.
“But the situation on farms was entirely the reverse. Milk producers found themselves incurring high levels of debt, given the very poor prices available at that time.
“Yes, farm-gate returns have improved since the turn of the year. These extra funds have been used to pay back the money owed to suppliers and the banks.
“But, given the price paid for May milk, it will be at least another two months before the affected farmers have any real money in their pockets.
“The only conclusion that milk suppliers can arrive at is that a conscious decision has been taken by the processers to sit on the increased margins they were, themselves, receiving for at least an extra month, before passing these back down the line,” Quain said.