Glanbia has issued a response to the Irish Farmers’ Association (IFA) regarding its milk price comments earlier today, Tuesday, May 7.
In a statement on the matter, a spokesperson for the group said that, rather than “focusing on a headline price in a particular month”, Glanbia milk price performance should be judged on its annual recordings.
“We remain committed to achieving a very competitive milk price performance in 2019 on that measure.
Glanbia Ireland is investing to create long-term value for all shareholders – a profit level of 3.2% is required to achieve this objective for everyone’s benefit.
“Furthermore, a substantial portion of the profit generated by Glanbia Ireland flows back to active farmers via the co-op,” the spokesperson concluded.
‘Huge level of anger’
This morning, IFA National Dairy Committee chairman Tom Phelan said Glanbia was the only milk purchaser to have cut its pay-out to farmers in both February and March, with a “huge level of anger” now building up among Glanbia suppliers.
Feedback from Glanbia farmer meetings and conversations with numerous suppliers clearly shows just how dangerously out of touch Glanbia has become as to how important a benchmark milk price is to farmers, Phelan added.
The chairman noted that, while Glanbia “rightly prides itself in being a leading player in the dairy industry”, its farmer suppliers legitimately expect it to be a “leading payer” too.
“As a processor of milk, Glanbia Ingredients Ireland takes a margin of 3.2% after tax – the highest in the industry – which has been agreed with farmers to satisfy its lending commitments to fund expansion investment.
Glanbia is a complex structure made up of many parts. It is well resourced, as shown by its ability to pay a €14 million trading bonus to farmers earlier this spring.
“However, Glanbia must realise that, ultimately, farmers will judge it on the milk price it pays every month.”
Performance
Glanbia has made three milk price announcements to date this year for January through to March supplies, with a price ranging from 32c/L including VAT for January through to 30.5c/L including VAT for March.