IFA National Dairy Committee Chairman Sean O’Leary today (Thursday) said that, at a time when all dairy farmers have been receiving milk prices well below basic production costs, the Glanbia 2c/l March milk price cut was a massive blow to their suppliers.
He said the cold and wet spring and larger number of animals on farms had increased feed bills and upped the pressure on farm cash flow, already challenged by low milk prices and loan repayments. In this context, Glanbia suppliers feel let down and very angry.
“This latest price cut is a huge hit on Glanbia suppliers, at a time when they are already under massive financial pressure,” he said.
“The 2c/l cut means that GII are now paying a price for milk of 22c/l including VAT, and are subsidising it with a co-op top up (farmers’ own money) and an exceptional Ornua bonus to bring it to a payout to farmers of 24c/l incl VAT,” he said.
“The 22c/l GII milk price is 1.7c/l less than with what they were receiving from Ornua for March based on the PPI, namely a milk price equivalent of 23.7c/l including VAT. GII should aim to return that price to farmers before any top ups,
“I know markets remain very weak. However, letting the farmers carry the bulk of the price downside is a road to nowhere – we need to see risk more fairly and sustainably shared,” he said.
“IFA Dairy Committee members supplying Glanbia will be meeting shortly, and will be calling on Glanbia to sit down with them for a detailed discussion on GII’s 2016 milk pricing strategy at the earliest opportunity,” Sean O’Leary concluded.