Dairy farmers who have invested heavily in their businesses in recent years made their frustrations plainly known during last Wednesday’s tense Glanbia AGM which was held in Kilkenny.
Their cries of “Out, Out, Out” upon the re-appointment of the plc’s directors at the end of the meeting at the Newpark Hotel said it all, their dissatisfaction arguably at an all-time high.
While milk prices remain low and the plc still profitable, Piltown farmer Joe Malone queried why €10 million of Glanbia’s €50 million profit couldn’t be ring fenced to assist farmers through difficult times.
Another farmer suggested that a proportion of the group’s profits from international activities be set aside to assist Irish milk prices given the crash in global milk prices.
Approximately 300 shareholders attended last Wednesday’s meeting, with many speaking from the floor calling for the plc’s board to step down.
The distinction between Glanbia plc and Glanbia Co-op was also made by farmers, who said that the plc’s modus operandi was to make money for shareholders while the Co-op’s principal task was to get the best milk price for farmers.
The €8 million loan scheme which the plc had provided was widely dismissed by speakers and was described by one shareholder as “laughable”.
Glanbia Chief Executive John Moloney said he was sympathetic to the plight of many on the floor, but stressed that the plc and farmers together found themselves facing “a difficult and challenging market”.
Mr Moloney, who has taken a 10 per cent pay cut due to the current economic environment, said that the board has had to make decisions which factored the market’s volatility into the equation.
“We cannot do this on our own,” he said. “What is facing us is a matter for the entire dairy sector.”
In a press statement understatedly headed ‘Farming Outlook Challenging’, Glanbia Chair Liam Herlihy “painted a mixed picture to farmers who have had to suffer falling mile prices in the past year”.
While Food Ingredients USA is “experiencing good demand”, the same cannot be said for Food Ingredients Ireland whose performance has “been weak in the period to date”.
Regarding its Irish operation, Glanbia stated that “the market remains challenging for Consumer Foods and against this backdrop this business unit continues to deliver a reasonable result”.
The statement added: “Agribusiness is being affected by pressures on farm incomes and Glanbia, as announced on 30 April, expects lower sales and profits for this business unit.”
Referring to its rationalisation programme, Glanbia “is on track to deliver significant annualised cost savings and further initiatives are underway to ensure the Group remains competitive in light of the sustained difficulties in the global economic market”.
On April 30th, Glanbia announced a downward revision to its 2009 earnings guidance of between 30 and 32 cent, which compares to the 35.86 cent achieved last year.
According to John Moloney: “We are pleased with how all other aspects of the business, developed as part of our growth strategy, are performing.”