A group of Kerry Group milk suppliers are to move ahead with a plan to establish a producer organisation in the coming months.
Around 300 Kerry Group milk suppliers gathered at Longcourt House Hotel in Newcastle West, Co. Limerick last night (Tuesday, September 26).
The suppliers, who say they are disappointed at the milk price being paid by Kerry in recent months, previously held a meeting at Woodlands Hotel in Adare, Co. Limerick on August 30.
They claim that the price paid by Kerry Group for milk over the first six months of the year is down by around 3.5c/L compared to other processors.
Suppliers also took part in two separate protests outside the Kerry Group plant at Charleville, Co. Cork and the company’s headquarters at Tralee, Co. Kerry in recent months.
Producer organisation
As their current contracts with Kerry Group are due to expire at the end of 2025, some suppliers are keen to establish a milk producer organisation, similar to what has been developed in the beef sector.
This organisation would aim to negotiate with milk purchasers, including Kerry Group, on behalf of suppliers.
Suppliers at last night’s public meeting were addressed by Limerick-based barrister, Ciaran Dolan who has already been involved with the establishment of two beef producer organisations.
Dolan, who is a producer organisation facilitator approved by the Department of Agriculture, Food and the Marine (DAFM), will draft a set of rules for the new group in the coming weeks.
Any contracts that would be negotiated by the producer organisation would be subject to approval by members.
Milk suppliers
Martin Crowe, a Kerry Group milk supplier from Doon, Co. Limerick, who chaired the meeting told Agriland that the suppliers are in “no hurry” and want to get the new producer organisation “right” over the next two years.
He said that the organisation will be open to all 2,900 Kerry Group milk suppliers, regardless of their size.
“Nobody will be excluded, all will be treated equally,” Crowe said.
Over the coming month, with guidance from Ciaran Dolan, the suppliers will form a committee to establish the producer organisation, following this the group will be accepting applications for members.
Crowe stressed that the organisation will explore the options available to suppliers and members will not be compelled to take any action if they do not want to.
Kerry Group
Founder of Concept Dairy, Diarmuid Mac Colgáin also spoke to the suppliers at last night’s meeting about milk price trends and capacity in the Irish milk processing system.
Earlier this month, Kerry Group confirmed that it will pay suppliers a base milk price of 32c/L, including VAT, for milk supplied during the month of August.
The processor also announced that there will be a further milk contract payment of 3c/L, including VAT, on all qualifying milk volumes.
Suppliers who receive the additional payment will see a price offering of 35c/L, including VAT, at 3.3% protein and 3.6% butterfat.
The base price for August milk of 32c/L reflected a 2c/L reduction on the base price paid by Kerry Group for supplies in July.
In a statement the processor said: “The short- to medium-term outlook on commodity dairy continues bearish with little sign of any demand side correction in the offing.
“The supply side across the major exporting regions has been more robust than anticipated year-to-date with signs of more significant softening just becoming apparent.”