Dairygold move on milk welcomed

A decision by Dairygold to increase the price it pays its farmer suppliers for milk was described by the IFA yesterday as evidence of what could be done by co-ops who seriously address their inefficiencies.

The 0.22c/l (1c/gal) rise to €26.47c/l (€120.33c/gal) followed news earlier this week that Dairygold and Glanbia are to share and co-operate in milk processing.

IFA Dairy Committee chairman Michael Murphy said he had been exhorting the industry to take costs out and co-operate to eliminate duplication, build on synergies and add more value to milk.

ICMSA president Pat O’Rourke said that the co-operation decision in principle on milk processing by Dairygold and Glanbia is a significant move by both firms.

Dairygold chief executive Jerry Henchy earlier described the Glanbia-Dairygold agreement as a very positive move in the Irish dairy sector.

Henchy said that the new co-processing arrangement will also help Glanbia and Dairygold in addressing the challenges posed by the lower EU support regime for the dairy sector.

Glanbia plc Group managing director John Moloney said the contract manufacturing agreement is consistent with its strategy of developing further industry alliances and co-operation to achieve mutual efficiencies.

“Glanbia has a long track record of co-operation with other processors, including Dairygold, and we view this mechanism as a sensible way forward for the industry,” he said.