Glanbia announces cut to April milk price

Glanbia has become the latest processor to announce its milk price, revealing a reduced milk price for April supplies.

Glanbia will pay its member milk suppliers 31c/L including VAT for April manufacturing milk supplies at 3.6% butterfat and 3.3% protein.

Based on current market returns, Glanbia Ireland (GI) will pay a base milk price for April of 29c/L including VAT for manufacturing milk based on the same solids.

In addition, Glanbia Co-op will make a support payment to members of 2c/L including VAT, for April manufacturing milk at 3.6% fat and 3.3% protein.

The Glanbia Ireland base price and the co-op support payment will be adjusted to reflect the actual constituents of milk delivered by suppliers.

Henry Corbally, Glanbia chairman, said: “We are acutely conscious that adverse weather has made 2018 a very challenging year to date for our milk suppliers. As a result, the board has made a number of decisions that will boost cash flow for members.”

The measures include:
  • As announced on May 1, Glanbia Co-op members will be entitled to avail of interest-free cash flow support from the 2018 Glanbia Advance Payment (GAP) Scheme. This voluntary scheme will make 1c/L of interest-free cash flow support available to participating suppliers on April milk supply;
  • An application form for the 2018 GAP scheme will issue shortly to all Glanbia Co-op members that supply their milk to Glanbia Ireland;
  • In the coming weeks, a payment of 26 cent per share of Share Interest (Special Dividend) will be paid to all Glanbia Co-op members on the share register at May 18, 2017. The Share Interest (Special Dividend) of €10 million will be worth over €1,000, on average, to milk supplying shareholders;
  • The board will be recommending to the forthcoming Glanbia Co-op Annual General Meeting on May 30, 2018, a 30% increase to 13 cent per share in the Share Interest (Ordinary Dividend). If approved by members, this will be worth a total of €4.8 million, or €520, on average, to milk supplying shareholders;
  • Glanbia Ireland will bring forward the payment of feed bonuses to participants in the Glanbia Milk & Feed Loyalty Scheme. This five-year scheme, which commenced on January 1, 2018, pays a Loyalty Bonus of €30/t on all dairy feed purchased by participants. For the year to date, this will be worth an average of €1,500 to scheme participants;
  • As previously announced, Glanbia will make a support payment of €50 per tonne on all qualifying feeds purchased in April. This will result in approximately €2.5 million being credited to members in their trading accounts.

Last week, Lakeland Dairies became the first processor to announce its price, deciding to hold its base price for April.

It will also provide a further payment to support milk producers following on from the recent bad weather and fodder crisis.

Lakeland held the base milk price at 31.78c/L including VAT plus a 1.5c/L support for all April milk supplies; this equates to 33.28c/L including VAT.

Global market conditions remain challenging. While there has been some improvement in skim markets, this is from a record low base and butter returns are carrying milk prices, according to the processor.

“At all times, Lakeland Dairies is committed to paying the maximum possible milk price in line with market conditions,” the co-op said.

This follows on from a base milk price reduction of 2.5c/L for March milk, which was offset by a support payment of 2.5c/L in light of exceptionally challenging conditions. This meant an effective milk price payout for March of 34.56c/L including VAT and lactose bonus.