Co-ops hold December milk price

With co-ops setting milk price for December, Ornua (formerly the Irish Dairy Board) has delivered them a €15m boost. The €15m comes from Ornua’s sale of foods distribution business DPI.

It is not yet clear how the payment will be made to the respective co-ops, but it is likely to be based on shareholding in Ornua or the volume of trade with the dairy organisation.

Thus far, Lakeland, Kerry and Glanbia have held their respective milk prices for December. Glanbia confirmed it will give all of its share from the Ornua payout to milk suppliers.

Ornua set its December Purchase Price Index (PPI) at 86.6, down from 88.2 for November. This represents a 7% drop in the PPI since the start of 2015. A PPI of 86.6 equates to a farmgate price of 24.6c/l.

IFA dairy committee chair Sean O’Leary has urged all other co-ops to hold December prices. “We are therefore asking all co-ops to continue supporting dairy farmers by holding milk prices, but also by providing technical, financial and merchant credit backing and assistance in the face of a spring of low milk prices and cashflow issues,” he said.

New chair of the ICMSA dairy committee Gerald Quain has welcomed the €15m payment by Ornua to co-ops. Quain said the “additional bonus would translate to something of the order of 0.5c/l of the milk supplied to Ornua” and he called on co-ops to pass this saving back to farmers.

Earlier this week Ornua announced that it has acquired Shanghai-based dairy manufacturer Ambrosia.

Ambrosia supplies dairy products to the high-end retail and food service markets in the Shanghai region.

The acquisition provides Ornua with its first manufacturing base in China.