Glanbia to review September price, it tells IFA group

The chairman and CEO of Glanbia have told the IFA that they would recommend a positive review of the September milk price to reflect improved market conditions, and would bring forward their next board meeting to do so. The farming body had sent a delegation of National Dairy Committee members supplying Glanbia, led by its president Padraig Walshe and Dairy Committee chairman Richard Kennedy, to meet the chairman Liam Herlihy, chief executive John Moloney and Jim Bergin. Their purpose was to seek a commitment from the company that it would look again at the decision not to increase the September milk price, and "send a positive signal to hard-pressed suppliers by lifting the price by 2c/l, reflecting the full extent of the Irish Dairy Board price increase". Mr. Walshe said: "Our strong team of 11 Glanbia milk suppliers, speaking on behalf of their fellow county dairy farmers, explained in detail their individual positions regarding investment and income loss for 2009. "They stated forcefully and clearly their own and fellow farmers' absolute need for a positive signal from Glanbia, with a 2c/l price increase now made possible by recovering dairy markets. "The Glanbia chairman and CEO have said clearly that they would recommend a positive review of the September milk price to reflect improved market conditions, and would bring forward their next board meeting to do so." Mr. Walsh said the IFA had made it clear that Glanbia suppliers are at financial breaking point, and urged it to boost their badly-beaten confidence immediately, by lifting the September price by 2c/l. Mr. Kennedy pointed out that many other co-ops had already chosen to support suppliers' cashflow situations by availing of market improvements to increase their September prices: Dairygold lifted its price by 1.75c/l, Connacht Gold by 1.52c/l, Lakeland by 1.2c/l and Town of Monaghan by 1c/l. "By deciding prematurely to hold their September price, Glanbia had created massive resentment among their suppliers and left them at a major disadvantage," he said. "Glanbia has the greatest scale and product mix, and should also have the best efficiencies of all milk processors in the country. Yet, they have an unfortunate history of being the first to take prices down, and the last to lift them up. "Glanbia suppliers at the meeting expressed strongly their exasperation with this when they are going through the worse income crisis in a generation. They left the Glanbia management team under no misapprehension that they expected an early board meeting to decide on a 2c/l September milk price increase." Mr. Kennedy urged all Glanbia suppliers to talk to the board members and urge them to deliver the earliest announcement of a 2c/l September milk price increase. ICMSA The ICMSA is unhappy about a decision last Thursday (October 22) by the EU Dairy Management Committee to abolish refunds on Skim Milk Powder and to reduce butter and Whole Milk Powder (WMP) refunds by 50%. It shows a complete lack of understanding of the problems facing dairy farmers according to its president Jackie Cahill. He said the level of incoherence being brought to critical decision-making at EU level was reaching crisis point and the only conclusion that could be drawn was that having wrecked the EU's dairy sector though systematic mismanagement, the commission was now intent on undermining any possibility of a recovery. "The reality is that the market recovery commenced in August and is still at a delicate stage. In those circumstances, the least we could have expected was that the EU Commission would help to maintain stability in the marketplace by holding the price support levels," said Mr. Cahill. "However, at the first opportunity, it has pulled those price supports and destabilised the gradual upward price movement. Last Monday the commissioner announced a €280m fund, hoping that would "calm down the dairy protesters". "Within two days of expressing that hope, her commission took a decision that has the potential to undermine the dairy market again. This is incoherence on an unprecedented level." He said decision could not be left unchallenged and he called on Minister Brendan Walsh to seek its reversal. The ICMSA says the market is showing signs of recovery and the EU Commission had to retain its price support levels at previous levels for a sustained period if that tentative recovery is to be allowed gain momentum. It is squarely the responsibility of the minister to ensure that this happens. "To tell dairy farmers who have yet to see any milk price increase that the market is recovering and that this justifies an immediate cut to refund levels is an insult and the decision has to be reversed immediately. "What the market needs now more than ever is a degree of stability and a clear plan of action based on logic and the realities of the situation. This policy of incoherence and off-the-top-of-the-head thinking has to end before it completely wrecks the dairy sector right across the EU," concluded Mr. Cahill.