Farmers praise Glanbia for milk price bonus
Dairy farmers have praised Glanbia Ireland for “signposting the road that other milk processors must follow” .
ICMSA Dairy Committee chairman Gerald Quain said his organisation wasn’t slow to criticise processors for inadequate milk prices, but it now behoved them to acknowledge Glanbia Ireland’s commitment to their suppliers, demonstrated particularly in the group’s decision to pay a 1 cent per litre bonus (cpl) for all January to June milk supplies.
He also welcomed the country’s largest milk processor in the State announcing a 35cpl price, including VAT, for August manufacturing milk supplies, and Lakelands raising their price for August milk to 35.5 cpl.
He said these are signs that Irish processors are moving decisively up the EU milk price league from their current 12th position.
Glanbia Ireland Chairman Henry Corbally said: “While the short term outlook remains positive, we note that the current high prices are leading to higher production in key regions, and may affect demand when fully passed through the supply chain. Exchange rates, particularly the weakening dollar, may also have an impact on returns in the medium term. The Board will continue to monitor market developments on a monthly basis.”
Glanbia Ireland’s January to June 1 cpl bonus will be included in this month’s milk payment.
Milk volumes allocated to Glanbia’s fixed milk price schemes will also benefit from the flat 1cpl bonus payment.
Mr Corbally said: “We are pleased that the business is in a position to make this very significant payment to our farmers for all milk supplied in the first half of this year.”
IFA figures show returns from EU commodities in the first week of September at just above 41cpl, before processing costs, assumed to be 5cpl.
IFA analysts note that some Irish co-ops’ market contracts will return more or less than these estimates, for some of their commodities.
One of the few clouds on the near horizon for farmers looking for high milk prices is weaker butter prices on EU futures market, which could be an indication that Europe’s high butter prices may turn a corner before too long.
According to IFA, severe shortages of butter have developed around Europe, especially for the food processing/food services trade, and prices have continued to lift beyond historical levels, with little or no prospect of additional milk supplies for the short term, due to northern hemisphere herds having passed their peak yield, with the southern hemisphere production season yet to pick up, and with reports from New Zealand of milk yields on most dairy farms being reduced due to poor weather.
The fear for dairy farmers, according to IFA, is that industrial purchasers of butter will re-formulate their recipes to use cheaper vegetable oil.
Manufacture of butter (and skim milk powder, its companion product, for which prices are low) in Europe is down for the first half of 2017, by more than 10% skim milk powder, and 6% for butter.
