Commenting on the latest developments in international dairy markets and just prior to meeting the CEO and Chairman of Glanbia PLC, John Comer, President of ICMSA, said the situation required a calm approach and no attempt should be made to exaggerate or ‘hype’ the present situation into some kind of market crisis in the hope of forcing through unjustified price cuts on the milk suppliers.
Mr Comer said that three factors were especially noteworthy: “ICMSA notes with disappointment the speed with which certain processors cut their milk price citing market returns and we see the stark contrast that makes with the record over the last 18-odd months where processors and Co-ops were distinctly slow to increase their prices even where those same market returns demonstrated a very serious gap and lag between they price they were getting and the price they were paying their own suppliers – that’s the first point.
The second point is that farmers should bear in mind that a substantial number of Co-ops and processors have long-term supply contracts signed and in place – as does the IDB – and these contracts are completely unaffected by the present market fluctuations”, continued Mr Comer.
“The third point we would make is that over the last 18 months the processors and Co-ops have replenished their cash reserves to a very high degree, ICMSA feels therefore that they are very, very well placed to absorb – in the first instance, at least – any drop in market returns and so buffer their suppliers from what every expert has estimated to be a very modest and temporary price adjustment. Put bluntly: they can well afford to absorb the recent market developments”. concluded Mr Comer.