Glanbia price cut an ‘unnecessary step’ – IFA

The decision taken by Glanbia yesterday, Monday, August 12, to cut its base price by 1c/L for July milk has been met with disappointment by the Irish Farmers’ Association (IFA), which raised concerns over the widening gap in pricing.

Commenting on the move, IFA dairy chairman Tom Phelan labelled the cut an “unnecessary step”, adding:

“Global supplies for the first half of the year are down and we expected Glanbia to hold its price, at the very least.

Despite the Ornua PPI [Purchase Price Index] dropping 0.6c/L, the gap between the Ornua PPI and the Glanbia base price has now widened.

“Apart from the west Cork co-ops, all milk purchasing co-ops have undershot the Ornua PPI in the milk price they have returned to farmers for most of the last eight months,” Phelan said.

“Other co-ops will be meeting to set milk prices from this week and they should be able, at the very minimum, to hold prices at their current levels,” he concluded.

Price cut ‘usual default response’

The Irish Creamery Milk Suppliers’ Association (ICMSA) also criticised Glanbia’s move, labelling it as unwarranted and representing “the usual default response of co-ops and processors”.

Commenting on the issue, ICMSA dairy committee chairperson Ger Quain said the default response is: “When in doubt, cut farmer milk price.”

The chairman added that, by Glanbia’s own admission, production in several key regions was down on corresponding levels last year.

While there may be some questions about market confidence and current levels of uncertainty, the decisive supply-demand data is still fundamentally sound,” he said.