Glanbia/gii Must Prove to Dairy Farmers That Their Pricing Model Will Pay Consistently Competitive Milk Prices

An IFA delegation led by President Eddie Downey and Dairy Chairman Sean O’Leary today (Thurs) met with Glanbia/GII Chairman Henry Corbally and CEO Jim Bergin. The IFA leaders gave voice to the serious anger expressed by dairy farmers, including liquid milk producers, about the September milk price cut. They left Glanbia in no doubt that these cuts have to stop and that their suppliers must be further supported until the milk price situation returns to sustainable levels.

“While we recognise that markets are challenging, and that despite many positive signs there are still uncertainties around the supply/demand balance for the coming months, Glanbia suppliers have been severely alarmed by the unilateral milk price cut applied by their milk purchaser, which leaves them with one of the lowest milk prices this month,” Mr Downey said.

“Farmers are angry at Glanbia, because 2015/16 is the first test of the GII pricing model, and they have yet to be convinced of its ability to provide the support they will need over the coming months, including the costly winter months for liquid milk producers, and the spring months when producers’ cheques will be depleted by lower constituents. They also need to be reassured of Glanbia’s commitment to paying consistently sustainable prices for the longer term,” he said.

“We strongly emphasised to Glanbia that they needed to prove to dairy farmers that they have specific plans and commitments in place to do so. At today’s meeting, Glanbia assured us they would address these concerns at the forthcoming regional meetings, but would also write individually to each supplier to outline their commitment to achieve this,” he said.

IFA National Dairy Chairman Sean O’Leary added: “Suppliers legitimately expect that Glanbia’s scale, efficiency and a diversified product mix, should put it among the top milk payers. Furthermore, they expect the GII model to support them and pay them a consistently competitive milk price. The September cut was poorly timed when all other co-ops held, and as farmers are already reviewing their business plans for the next year in anticipation of a difficult number of months”.

“Glanbia must take on board the legitimacy of their suppliers’ concerns, and address them in earnest over the coming months. Failing to do so will dent their suppliers’ confidence, and could materially affect their development plans, and consequently Glanbia’s own development plans,” he concluded.