IFA national dairy chairman Sean O’Leary says Glanbia has shortchanged farmers by seeking to keep the cost of milk well below that paid for by other co-ops.
Glanbia Ingredients Ireland Ltd is to cut 2c/l off its milk price, which means it will pay 22c/l including Vat for March milk.
The company’s suppliers will receive 24c/l, but this figure will include an exceptional Ornua bonus and a co-op top up, which Mr O’Leary says is effectively the farmer’s own money.
Ornua announced on Tuesday that it will suspend its 0.14c/l levy on dairy farmers until the Ornua purchase price index returns to a level equivalent to 30.5c/l incl Vat.
Glanbia announced its 2c per litre price cut yesterday.
“This latest price cut is a huge hit on Glanbia suppliers, at a time when they are already under massive financial pressure,” said Mr O’Leary. “The 22c/l Glanbia Ingredients Ireland milk price is 1.7c/l less than with what they were receiving from Ornua for March based on the PPI, namely 23.7c/l including Vat. Glanbia Ingredients Ireland should aim to return that price to farmers before any top-ups.”
ICMSA dairy committee chairman Gerald Quain said that the Ornua purchase price index only fell 1.2% points, equivalent to 0.3c/l. As a global brand, Glanbia should pay a top rather than a bottom price, he said.
“Glanbia Ingredients Ireland Ltd have invested in scale over the last number of years and actively encouraged their suppliers to do the same and it is absolutely imperative that their suppliers are not put ‘to the wire’ for merely following Glanbia Ingredients Ireland Ltd’s lead and trying to improve their businesses,” said Mr Quain.
The farmer groups also criticised Lakeland for cutting 1c/l on its core price for March milk, down to 24.5c/l from the 25.5c/l in February.
© Irish Examiner Ltd. All rights reserved