ICMSA accuse Glanbia and other processors of ‘sitting on returns while their suppliers struggle’

The Deputy President of ICMSA, Pat McCormack, has accused the state’s biggest processors of sitting on vastly improved market returns while watching their suppliers struggle and he has called on the processors to belatedly recognise the dire straits their suppliers are in and to set proper prices that reflect to a meaningful degree the kind of market buoyancy witnessed month-on-month since January. Mr McCormack, who is also Chairman of the Diary Committee, said that there was a growing degree of anger and despair amongst dairy farmers at what he said was an “inexplicable” gap between the IDB Index and the price being paid to suppliers during the one of the worst fodder and weather crisis in living memory. He named as Kerry Group and Glanbia as the two most glaring cases where the price being paid to suppliers was “hopelessly adrift” of the prices the processors themselves were receiving.

The Deputy President of ICMSA, Pat McCormack, has accused the state’s biggest processors of sitting on vastly improved market returns while watching their suppliers struggle and he has called on the processors to belatedly recognise the dire straits their suppliers are in and to set proper prices that reflect to a meaningful degree the kind of market buoyancy witnessed month-on-month since January. Mr McCormack, who is also Chairman of the Diary Committee, said that there was a growing degree of anger and despair amongst dairy farmers at what he said was an “inexplicable” gap between the IDB Index and the price being paid to suppliers during the one of the worst fodder and weather crisis in living memory. He named as Kerry Group and Glanbia as the two most glaring cases where the price being paid to suppliers was “hopelessly adrift” of the prices the processors themselves were receiving.

“The level of anger amongst farmers is building rapidly as we see the IDB Index reach 120.6 from a January level of 111.0 at the same time as Kerry decide not to pay any increase at all for April milk and the biggest milk processor in the state, Glanbia, throws a cent per litre the way of its suppliers and describes it as some kind of ‘Hardship Payment’. I sometimes wonder whether the processors realise that we, too, can monitor the accessible date and we, too, are perfectly capable of crunching the figures. And those figures point to a milk price that is very substantially higher than the one we are currently being paid”, said Mr McCormack.

“The facts are quite simple: The Global Dairy Trade Auction average weighted price on all products has increased by no less than 40% between 3 January and 1 May. If we look at the Dutch Dairy Quotations and take the period between 11 January and 1 May then we see Butter up €740 per tonne – a rise of 22%; we see WMP up €790 per tonne – a rise of 27% and SMP animal feed quality up €480 per tonne – a rise of 19%. Those are the facts and they become very stark facts indeed when you compare them to the per cent increase in milk price paid to suppliers over the same period. Even allowing for forward contracting by the processors, there is still an inexplicable double-digit gap between the returns the processors are receiving and the increase that they have paid to their suppliers - on whom, it bears repeating, the whole billion-euro sector actually rests. Farmers will have noted that Town of Monaghan stepped up this week to a 37c/L milk price and did it without any fuss or fanfare. Farmers will also have noted that Town of Monaghan is farmer owned and they will draw the conclusion about the ability or willingness of other processors to resist the temptation to sit on increased returns while their suppliers struggle”, he concluded.