Glanbia announces 'historic' 5c/L milk price rise

"God knows it’s needed on the inputs side."

Glanbia has announced a base price for March milk that will see a “historic” increase of 5c/L received by suppliers.

Glanbia’s milk price has increased to 47.08c/L (including Vat) for creamery milk supplies at 3.6% butterfat and 3.3% protein.

The overall price includes a base milk price for March of 46.58c/L, an increase of 5c/L from the February base price of 41.58c/L.

Glanbia Co-op chairman John Murphy said dairy market prices are now at “unprecedented highs, with global milk flows likely to be weaker in the first half of this year”.

“We are in uncharted territory as rising costs and tight supplies of key farm inputs such as feed and fertiliser contribute to the current strength in dairy prices on global markets,” Mr Murphy added. 

“However, we note that the current strong inflationary period may impact consumer demand. The board will continue to closely monitor developments.”

The board has decided from April onwards to gradually create a stability fund to “help protect against any sudden change in market dynamics”.

'Historic' increase

Commenting on the 5c/L increase, chairman of the Irish Creamery Milk Suppliers’ Association dairy committee Noel Murphy said the association expects a similar price increase for milk supplied this month.

“We want to welcome this increase by Glanbia Ireland — it’s what the market is indicating — but God knows it’s needed on the inputs side, so there is an equilibrium of sorts there,” Mr Murphy said.

“The other co-ops will now have to announce similar scale increases in the coming days.

“Input price increases, such as fertiliser, are hitting hard at present because these bills are falling due quicker this year.”

Mr Murphy said that the 5c/L increase was a “historic rise” in any one month, but said that the ICMSA expected the prices for dairy to continue to increase again, and the same is expected of other co-ops.

Meanwhile, in response to the “extreme and unprecedented inflation” in farm inputs, the board of Glanbia Co-op has announced a six-month pilot change in the timing of milk payments.

This will start with the June milk payment in July. Approximately 50% of the payment due to milk suppliers will be paid early, on the ninth day of the month rather than the 18th.

Once the milk price for the month is set, the remaining balance due to milk suppliers will be paid by the 25th day of the month.

The early payment value will be calculated based on the previous month’s announced price and will be adjusted for constituents and any applicable bonus payments.

Co-op chairman Mr Murphy said the board believes that an early milk payment each month will “assist farmers by providing a more regular cash inflow” approximately every fortnight.

Feedback from suppliers will be reviewed before the decision is made on a 2023 payment policy.