Warning after Glanbia cuts milk price

Dairy farmers are facing into a lossmaking 2012 due to Glanbia’s decision to shave 2.5c per litre off its May milk price, warns ICMSA deputy president and dairy chairman Pat McCormack.

Glanbia had already cut 3cpl off its price in April. Mr McCormack estimates this 5.5cpl cut may cost a 65-cow farmer €16,500 a year, based on a 300,000 litre output.

With fuel and animal feed prices also soaring, and with adverse weather conditions also hitting, dairy farmers could be €30,000 down overall for 2012 versus 2011. The CSO estimated average farm incomes at €21,500 for last year.

“Dairy farmers’ incomes are dictated by the price they get in the peak months of May and June,” Mr McCormack said.

“While dairy was profitable last year, this profit will be wiped by this cut. This has huge implications for the Food Harvest 2020 ambitions for Irish dairy.”

Dairy sources are expecting the co-ops in West Cork and Kerry to impose similar cuts by the end of this week, perhaps a 3cpl cut to under 30cpl. Glanbia is now paying its suppliers 28.5c, while the Town of Monaghan co-op is at 29cpl, having cut 2c off its price per litre of milk.

Mr McCormack said: “Carbery must be complimented for holding its April price at 34cpl. We have written to every co-op in the country asking them to wait until the next dairy trade auction before making any decision.”

The IFA national dairy committee chairman, Kevin Kiersey, has called on Glanbia to show leadership on behalf of their farmer shareholders, and to announce an end to milk price cuts for 2012.

“This is a major blow to Glanbia suppliers; it will make it nigh-on impossible for them to make the kind of on-farm investment required to deliver on the post-2015 expansion Glanbia expects of them,” he said.