Friday the 13th proved a less than happy day for Waterford dairy farmers as the Board of Glanbia chose the infamous date in question to announce a further cut in milk prices.
Citing the “continued volatility on global dairy markets and declining market returns,” Glanbia announced that the manufacturing milk price has been reduced by 1.5 cent per litre (cpl) for May and 1.5cpl for June.
The news was greeted with anger by the Irish Farmers Association (IFA), whose Dairy Chairman immediately called for the decision to be rescinded.
Glanbia is to pay 33.14cpl VAT inclusive for May manufacturing milk and 31.56cpl VAT inclusive for June manufacturing milk.
“Glanbia has absorbed much of the impact of falling dairy markets since the backend of last year,” said company Chairman Liam Herlihy.
“Unfortunately dairy market returns have continued to decline as a result of weaker demand, product substitution and adverse currency movement.
“While markets are volatile at the moment, we are seeing evidence of prices stabilising and have factored some potential uplift in prices into today’s decision.”
Sympathy for Glanbia’s position was thin on the ground from IFA Dairy Chair Richard Kennedy, who described the cut as “an abuse of its position as the country’s largest milk producer”.
“Yet again, Glanbia, the most efficient, largest, least commodity-dependent milk purchaser in Ireland, are determined to knock back milk prices at producers’ expense, even pre-judging June milk prices against positive market trends” he said.
“Every time I meet with Glanbia management and board members, they remind me just how many millions they have invested over the years to improve their efficiency, their scale and reduce their exposure to lower-returning commodities.
“Yet, last Friday, they have cut the price just as drastically as the co-ops which are totally dependent on basic commodities, in the process seeking yet again to lead prices down for the month of June.”
Mr Kennedy contended that Glanbia is “short-changing not just their suppliers, but every dairy farmer in the country.”
He added: “Their much trumpeted plans for expansion and development sound hollow when they are clearly trying to lead all other co-op prices down at a time when dairy markets are rising again.”
Mr Kennedy claimed that no member of the Glanbia board had “met, talked with or been contacted by National Dairy Committee members and other IFA milk supplier members” before last Friday’s announcement.
“This decision is a kick in the teeth to all dairy farmers,” he said. “I note that a Board meeting is due at the end of the month. I would urge Glanbia board members to use the coming days to take the temperature among their milk supplier shareholders.
“Market prices for most dairy products are rising, and they have made the wrong decision. They must rescind at least the June price cut.”
Meanwhile, Mr Kennedy has welcomed the commitment made by West Cork-based Carbery Milk Products to hold their milk prices for the rest of the year after April and May price cuts totalling six cent per litre.
“The Carbery move must inspire the other co-ops to put an end to any further price adjustments,” he said.
“While market returns had weakened since last September, the full benefits of the extraordinary buoyancy of 2007 was not entirely passed back, as evidenced by the massive profit increases filed by all co-ops.”