The decision of Glanbia Ingredients Ireland Ltd (GIIL) to cut its base price to 22c/L for March milk is “unjustified” and will be extremely disappointing to their milk suppliers according to Gerald Quain, Chairperson of ICMSA Dairy Committee.
“GIIL has invested in scale over the last number of years and actively encouraged its suppliers to do the same and it is absolutely imperative that its suppliers are not put ‘to the wire’ for merely following GIIl’s lead and trying to improve their businesses”, he said.
This is a critical juncture for the Irish dairy farmer and it is a matter of profound regret that the largest processor in the country is leading the way in cutting the milk price, he said.
“Glanbia is a global brand and have invested large amounts of money into processing capacity and, as a global leader, they should be demonstrating a commitment to our sector and their suppliers by paying a price at the top – not the bottom.
“We recognised and acknowledged their decision to subsidise price by means of the ‘co-op support’ but that cannot – and does not – offset the fact that they seem to be setting the pace in terms of reducing base price,” noted Quain.
The ICMSA spokesperson said that looking at the market for actual products sold in March, the Ornua PPI shows a return of 84.2 or the equivalent of 23.7c/L, indicating even less justification for the action.
“The index only fell 1.2 percentage points, which is the equivalent of less than one third of a cent per litre.
“While spot quotes remain in trouble on the market, it is not unrealistic for farmers to expect to receive the same price for their product as we know was actually paid to Ireland’s largest Co-op Ornua last month,” concluded Quain.