Glanbia price cut ‘brings milk price perilously close to production costs’

Dairy farmers will be shocked by Glanbia’s decision to cut milk prices by 2.5c per litre to 30.5c/l, said IFA national dairy committee chairman Sean O’Leary.

The Cork-based farmer said the co-op’s September cheque represented a sizeable amount of milk for Glanbia’s suppliers. He urged other co-ops to be more judicious in their September milk price decisions, noting that no co-op was offering fixed price contracts to farmers, and that few had the type of non-core resources Glanbia was proposing to use to mitigate price cuts.

“While the Glanbia Co-op commitment to pay 0.5c/l on all 2014 milk supplies, said to be equivalent to the value of the cut to year-end, will undoubtedly be of value to producers, it will still leave them starting the new spring season with a base milk price uncomfortably close to production costs — indeed, in excess of them for many farmers,” said Mr O’Leary.