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With the dairy industry taking stock of Glanbia’s new supply rules, it’s fair to say there is shock that a self-imposed Glanbia rule is affecting future plans for its suppliers.
The smart money for a long time was that environmental rules would be the new quota before the dairy businesses themselves slowed down dairy ambition.
On one hand, Glanbia has facilitated huge growth in milk supply in its region, far more than any other processor. On the other, farmers are wondering why this announcement to limit peak came to this in March 2021 given the information that Glanbia has on dairy farmers and the forecast for milk supply etc.
They say surely some other option should have been investigated and progressed as objections and hold-ups are almost part of the process when it comes to investment these days.
Knowing some of the members around the Glanbia board table, this must be a very difficult decision to act on.
Co-operative ambitions
As an entity, Glanbia set out its stall to take all milk produced, fulfilling its co-operative ambitions. This slowdown at peak goes against its ambitions.
For me, the most difficult part to understand is this shift to incentivising December and January milk.
Glanbia has a cohort of winter milk and liquid suppliers filling that milk supply slot. For manufacturing suppliers, December and January milk just doesn’t make sense.
There is a real danger of sending mixed messages on this one.
If the intention was to recycle the peak penalty money back to suppliers, then the months of September, October and November would have been far better than December, January and February.
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