Kerry and Glanbia under fire for holding milk prices
Some co-ops are ‘enhancing their margins’ at farmers’ expense, claim ICMSA
IRISH dairy processors have been accused of “enhancing their own margins at the expense of their suppliers”.
While the ICMSA welcomed Lakeland Dairies’ announcement of a 1.22c/l increase in its September milk price, the dairy farmers’ body expressed disappointment that both Glanbia and Kerry had held at their August levels.
Dairy chairman Ger Quain said the decision by Kerry and Glanbia represented a deliberate choice “to enhance their own margins at the expense of their farmer-suppliers”.
Mr Quain accepted that dairy markets had weakened in recent weeks, but he claimed the full benefits of the market improvements had not worked their way back to farmers.
“Farmers will clearly point to the investment in value added over the last number of years made by these two processors and, indeed, their own investment at farm level —including in SDAS — and they will ask the very simple question: why is their milk price still below the average EU milk price and not far ahead of the Fonterra price, which is broadly based on commodity-type products?” he said.
Disadvantage
The IFA also expressed disappointment with the decision of Kerry and Glanbia to hold milk prices and they called on processors to deliver a 1c/l increase for September.
“At a time when our European fellow dairy farmers have received increased September milk prices and further uplifts have been announced for October milk, it is crucial that dairy co-ops in Ireland would not leave their suppliers at a disadvantage,” said IFA dairy chairman Sean O’Leary.
This month’s move by Lakeland Dairies takes the co-op to a base price of 36.5c/l including VAT. Kerry is on 36c/l, while Glanbia is on 35c/l.
However, Lakelands has cautioned that the outlook for 2018 is not as positive for milk prices.
“Unfortunately butter prices have passed peak and are now much weaker as we face into 2018, and powder prices are returning less than intervention,” the co-operative warned.