Agriculture

Glanbia decision to leave milk price unchanged will come as a disappointment

ICMSA had said market showed room for increase

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Glanbia decision to leave milk price unchanged will come as a disappointment

Glanbia Ireland is to leave its February base milk price unchanged from January

The decision by Glanbia Ireland to leave its February base milk price unchanged from January is bound to be met with disappointment by farming organisations.

Glanbia Ireland (GI) will pay a base milk price for February of 31cpl (including VAT) for creamery milk at 3.6% fat and 3.3% protein. This is unchanged from the January base price, Glanbia said in a statement.

It will pay its member milk suppliers 34.42cpl (including VAT) for February creamery milk supplies at 3.6% butterfat and 3.3% protein.

Earlier, the chairperson of ICMSA’s dairy committee, Ger Quain, said with co-op boards due to meet on the February price, that examination of the figures and market returns showed room for a milk price increase on February supplies.

Glanbia's farmer members will also receive a 0.42cpl (including VAT) payment from Glanbia Co-op on all milk supplied this month as their Share of GI Profit. This payment, which will be adjusted each month to reflect the constituents of milk supplied, will be paid on all milk supplied by co-op members in 2020.

An Early Calving Bonus (ECB) of 3cpl (including VAT) will be paid to creamery suppliers for February milk. The ECB replaces the previous Seasonality Scheme.

The Glanbia Ireland base price, Glanbia Co-op Share of GI Profit payment and Early Calving Bonus will be adjusted to reflect the actual constituents of milk delivered by suppliers.

Glanbia Ireland liquid milk suppliers who deliver high quality milk year round receive a bonus of 7.4cpl (including VAT) on their contracted liquid milk volumes for the six months from October to March.

Participants in the Autumn Calving Scheme (ACS) will be paid 8.5cpl (including VAT) on their contracted November to February volumes. Liquid Milk contract holders and Autumn Calving Scheme participants are not eligible for the Early Calving Bonus.

“The global spread of coronavirus is affecting dairy supply chains and ultimately trade. Our immediate priorities are to ensure the safety of our people and to assist our farmer suppliers and customers to work through the challenges. We urge everyone to follow the official advice from the HSE and other appropriate authorities," said  Glanbia chairman Martin Keane 

A number of weeks ago, Glanbia Ireland initiated its Business Continuity Planning (BCP) process to deal with the challenges arising from the current outbreak of coronavirus . This includes contingency plans for safe deliveries to, and collections from, any farm impacted by the outbreak.

Meanwhile, Mr Quain said that it was absolutely essential that a price increase was delivered for farmers.

“Most Irish processors are paying less than 32cpl and with the Ornua index at 33.7 just on that basis there is quite clearly ample room for a milk price increase based on market returns. In addition, the LTO milk league show that the Irish processors still occupying three of the bottom four positions while also paying a milk price below what Fonterra in New Zealand is paying – a situation that defies logic and one that is simply not acceptable to Irish farmers. If milk processors in other dairy producing regions can return a higher milk price, there is absolutely no reason why our processors cannot follow suit as they are all selling into the same markets and we should be obtaining a grass-based premium,” said Mr Quain.

He said that there was uncertainty at present with coronavirus, but it was quite clear that a lot of product had been forward sold and this should not impact on milk price.

In addition, global milk supplies were expected to grow by no more than one percent in 2020 while demand was expected to grow in the range 1.5 to 2 percent. The market should be in a fairly positive position despite the uncertainties with coronavirus, said the dairy chair.

“The overwhelming evidence points to farmers being fully justified in seeking a February milk price increase from their co-op boards”, said Mr Quain.