Processors told: Don’t cut milk price, rationalise

Processors told: don”t cut milk price, rationalise

IRISH FARM leaders are demanding greater efforts by milk processors to rationalise and improve efficiency, rather than resorting to cutting prices.

 The call was made by Irish Farmers” Association president John Dillon at a demonstration this week outside the Kilkenny offices of Glanbia, after the firm”s announcement of a 0.88c/litre (0.61p/litre) cut in its manufacturing milk price for March.

 Plenty of fat

“The co-ops still have plenty of fat to cut out,” said Mr Dillon. “They”ve got to cut administration and management. They have to take out inefficiencies, accept centralised, independent milk testing and make joint investments with other co-ops to add more value. They must have a strategy to raise returns to suppliers.” Mr Dillon said Glanbia”s cut would cost a 273,000-litre producer 2400 (1680) a year, equal to a 12% income drop. At a time when many farmers were also facing big superlevy bills, this showed that Glanbia was more interested in pandering to shareholders than looking after suppliers.

Prop up margin

 “If Glanbia insist on using dairy farmers” incomes to prop up their margin, they will end up short of milk,” he warned. Glanbia insists its latest cut reflects market reality. “We”re merely implementing the mid-term review (of the CAP),” said a spokeswoman. “Product values were expected to fall last year, but they did not. This year they have dropped – especially casein – and this has to be passed on.”