Tipperary farming: IFA is critical of Glanbia’s decision on February milk

Glanbia’s decision to maintain its February base milk price has been criticised by the IFA.

Glanbia will pay its member milk suppliers 31.5cpl, including VAT, for February manufacturing milk supplies at 3.6% butterfat and 3.3% protein.

The company said that, in line with current market returns, Glanbia has maintained its base milk price for February at 30cpl including VAT, for manufacturing milk at 3.6% fat and 3.3% protein.

In addition, Glanbia will make an interim market payment of 1cpl, including VAT, on all February milk supplies, excluding Fixed Milk Price Schemes paying above 31cpl.

During this period of market transition, the board has decided to make a support payment to members of 0.5cpl, including VAT.

The payments and the support payment will be adjusted to reflect the actual constituents of milk delivered by suppliers.

“Glanbia Ireland is holding its base price at 30cpl and will again for February pay a 1cpl interim market payment,” said Glanbia chairman Martin Keane.

He said that Brexit uncertainty had led to short term changes in purchasing patterns.

Protein prices had improved, but market returns had not recovered from the reduction in butter prices over recent months, said the chairman.

While the recent series of GDT auction results was positive, it was from a lower base and remained below the current Glanbia Ireland price, he said.

“With the market based milk price currently at approximately 30cpl, the board will continue to monitor developments on a monthly basis,” said Mr Keane.

Participants in the Glanbia Loyalty Scheme will be paid their loyalty reward with their February milk payment.

Participants in this five-year milk and feed scheme will be paid €30 per tonne on their qualifying tonnes of dairy feed purchased in 2018. This month’s payment covers the period May to December 2018.

In light of the challenging conditions last spring, an interim payment was made in May 2018 for dairy feed purchased in the January to April period.

However, IFA national dairy chair Tom Phelan said that the Glanbia cut in the co-op contribution to their payout by 0.5c/l, unmatched by a corresponding increase in the base, reduces the payout to farmers to 29.88cpl, plus VAT.

Current market returns would justify a higher payout than Glanbia was currently returning, he said, and GII should be able to pay a competitive base price without the need for co-op support.

IFA has shown that returns from a number of EU and global indicators at the end of February would return milk prices equivalent to between 30cpl and 32.5cpl, plus VAT.  Indeed, even the Ornua PPI for February is equivalent to 30.55c/l + VAT,” Mr Phelan said.

“The decision by the board to cut the top up without at least an equivalent increase in the GII base is a let down for Glanbia suppliers,” said Mr Phelan.

He said that said the decision by Lakeland to maintain their milk price at 30.6cpl, plus VAT, was justified by current market returns and was to be welcomed.