The chair of the board of Kerry Co-op has defended a decision to pay the 2021 leading milk-price payment based on suppliers’ milk constituents.
Denis Carroll was addressing farmers at a meeting of the Kerry executive of the Irish Creamery Milk Suppliers’ Association (ICMSA) last night (April 25).
Earlier this month, the co-op and Kerry Group reached an agreement on the long-running issue.
Arbitration is still ongoing on outstanding leading milk-price issues.
In April 2021, talks between Kerry Co-op and Kerry Group on a potential dairy business joint venture were suspended after over 18 months of discussions.
Carroll previously told suppliers that his focus is on rebuilding trust between the parties and resolving the 2021 milk payment.
Payment
The deal for 2021 saw suppliers receive a payment of 0.85c/L on all qualifying milk volumes from last year.
However, some farmers were annoyed that the payment was based on milk constituents rather than on a flat-rate basis similar to previous top-up payments.
Denis Carroll told the ICMSA meeting that Kerry Group gave the co-op board the option of how they wanted the payment to be paid.
“The change that we as a board made was that we paid this payment out on constituents. There was maybe was an expectation, and maybe a legitimate expectation, that historically this 13th payment came flat.
“We, as a board, discussed it and we came to the conclusion that the logical thing to do was to pay it on constituents,” he said.
As previously reported by Agriland, Kerry Group launched a review after a systems issue impacted the distribution of the payment to certain suppliers.
“Unfortunately, when Kerry [Group] set about paying this there was a blip in the system. But to the best of my knowledge anyone who was underpaid has got the balance paid into their accounts this morning (April 25),” Carroll said.
Milk suppliers
One farmer told the meeting that he was “disgusted” at how the 2021 leading milk price payment was calculated.
He explained that his payment was “well short” of his expectations when it arrived with his March milk cheque.
The supplier alleged that the board of Kerry Co-op were not treating all of the farmers it represents equally.
Denis Carroll “totally and emphatically” rejected the farmer’s claim that the decision by the board was based on greed.
“The second challenge I issued Kerry [Group] when I said we’d focus on 2021 was that they would lead out the milk price for 2022 and show us the capacity of this new [joint] venture to pay for milk.
“But I didn’t add on that I want them to leave a cent of it there to be paid out as a 13th payment on a flat basis,” he said.
Carroll explained that the original commitment outlined the leading milk price was to be paid as the year evolved and reviewed on a regular basis by the board.
Another farmer told the ICMSA meeting that calculating top-up payments on a flat rate was unfair as monthly milk cheques are based on solids.
Carroll said that the board’s next focus is the Kerry Co-op Annual General Meeting (AGM) and a Special General Meeting (SGM), which will be held jointly on June 21, 2022.