IFA estimates Glanbia’s 4,000 suppliers to lose a collective €72m

GLANBIA’s 4,000 farmer suppliers are set to lose a collective €72 million this year at the current price they are being paid for manufacturing milk.

The Irish Farmers Association calculated the loss yesterday as it continued with a campaign of protest against milk price cuts in Portlaoise and Wexford.

Dairy Committee chairman Richard Kennedy, speaking in Wexford last night, urged Glanbia’s farmer-board members to apply creative thinking to reverse its 3.7c/l cut for March.

“I know full well how difficult dairy markets are — however, I cannot understand how the biggest, most efficient and most diversified processor in the country cannot pay a better milk price than some of our smallest, most commodity-dependent co-ops,” he said.

“After all, they all operate in the same difficult market, but the West Cork Co-ops and Lakeland Dairies will return up to 3c/l, or e500 more to their suppliers for their March milk alone.”

Mr Kennedy said at 20 cent a litre, milk producers are receiving 7c/l less than it costs them to produce milk. This means that they will be on average e18,000 in the red in 2009 — a collective e72m loss among Glanbia’s 4,000 suppliers.

He said this was intolerable and unsustainable, particularly in light of the fact that Glanbia was guaranteeing its corporate shareholders projected profits of at least e134m for 2009.

However, the Irish Co-operative Organisation Society (ICOS), the co-ops umbrella body, said while dairy markets seem to have bottomed out, prices are still at or below the EU support level being equivalent to 16 to 17 cents per litre.

Pat McLoughlin, president, said due to extremely high-stock levels in Europe, the US and New Zealand it will be much later in the year at best before any real recovery is expected.

“It is clear that milk prices paid to farmers must reflect real market returns and the co-ops are not in a position to support milk prices to the extent they did in 2008,” Mr McLoughlin said.