Ornua will be be present at a June meeting of the Joint Oireachtas Committee for Agriculture, Food and the Marine.
The dairy co-operative, which markets and sells dairy products on behalf of a number of Irish co-ops – and indirectly, Irish farmers – will address the committee in relation to fixed-price milk contracts, among other industry-related items.
Ornua is Ireland’s largest exporter of Irish dairy products, exporting to 110 countries worldwide. It is headquartered in Dublin, and has annualised sales of over €2.3 billion and a global team of 2,850 employees.
In 2020, the company’s operating profits increased by 69% to €83.1 million. It also paid out to its member co-ops an additional €68.7m, representing an increase of 54% in premiums and bonuses on the previous year.
The company predicted that similar growth would not be repeated in 2021 as the consequences of the global Covid-19 pandemic became apparent. And all will be revealed next week (Wednesday, June 1), when the company announces details of of its operating and financial results for 2021.
Fixed price contracts and Ornua
Confirmation of the co-operative’s attendance at the Oireachtas meeting on June 22 has been broadly welcomed.
Ornua’s name has been referenced in recent weeks in relation to the fixed-price contract issue.
At a recent meeting of the Joint Oireachtas Committee for Agriculture, Food and the Marine, representatives of Icos attended to discuss the contract issues facing farmers.
At that meeting, calls were made for Ornua to attend.
This week in the Dáil, Deputy Brendan Griffin also raised the issue with Minister for Agriculture, Food and the Marine, and said that Ornua should be part of the conversation.
‘Ornua – one of a number of companies’
In a recent statement to Agriland, Ornua explained that it has agreements to purchase dairy products from its member co-operatives at agreed product prices to “support their fixed-milk arrangements with farmers who supply them”.
It also pointed out that, as it understands it, Ornua is one of a number of companies engaged in similar agreements with co-operatives.
It also said it is not in a position to comment on individual fixed-milk contract arrangements agreed between co-operatives and the farmers who supply them.
The burden must be shared
Chair of the Joint Oireachtas Committee for Agriculture, Food and the Marine, Jackie Cahill, said that “the pain that fixed-price contracts are causing some farmers has to be shared” and he is satisfied that Ornua will address the issue with TDs and senators in few weeks’.
“I have met a lot of the farmers who have those contracts. They accept that they signed them, but in an awful lot of cases, financial institutions were putting farmers under pressure to sign them to get security of price,” Deputy Cahill told Agriland.
He said the processors moving recently on the prices they are paying to their suppliers in fixed-price contracts was welcome, but he believes that the processors’ customers also have to play a part.
“If everyone took a portion of the hardship that this is inflicting, hopefully everyone will survive, especially the primary producer.”
He said it is his belief that Ornua is involved “in the vast majority of cases, with these fixed milk contracts”.
“Ornua made a very substantial profit last year – and well done to them, every business has to run at a profit.
“What I am saying is that a significant number of our dairy farmers were really caught offside and Ornua has to take on some of that pain so that we can still guarantee a volume of milk going forward, and so that people don’t go into liquidation.
“That is what I would be saying to Ornua,” Deputy Cahill told Agriland, adding:
“We know that for you [Ornua] to support these farmers it is going to cost you money, it will come out of your bottom line, but in the interests of fairness and in ensuring that these farmers are there for the future, you are going to have to take a hit as well as the primary producer.”
Deputy Brendan Griffin also told Agriland that Ornua’s decision to attend the committee next month was a “welcome development”.
“It’s important that all stakeholders in our agricultural sectors do their best for the overall good of the industry at this most challenging time for farmers and their families.”