Lower operating profit predicted by Glanbia as global product price weakens and milk price lags behind

Glanbia has predicted lower Dairy Ireland operating profit and margins for the first half of 2011, as global dairy market prices continue to weaken, and reductions in input costs such as milk price lag behind dairy ingredient price trends.

In this week’s interim management statement, the group said international demand for dairy products remained solid in the first three months of the year, supported by demand from developing economies. But prices for most dairy categories have weakened year to date, mainly due to an oversupply of milk resulting from sustained good weather in most milk producing regions.

According to the Dutch Dairy Board’s latest market analysis, international prices for dairy products remain well above historical averages.