The reduction to February milk prices is the first step in stemming losses from trading, chief executive of Glanbia Ireland Jim Bergin has said.
“Unfortunately further reductions are inevitable until we reach an equilibrium with market returns,” Bergin said on Tuesday.
“The management and staff will do everything in their power to optimise market value while we wait for the tide to turn positive again. We are hopeful that this might happen in the fourth quarter of 2018.”
He said that US and Oceania processors are operating at a farmgate price of 27c/l to 29c/l. The board of Glanbia reduced its February base price by 3c/l and gave a 1c/ top up due to difficulties experienced by weather. Its base price is 30.36c/l excluding VAT for February manufacturing milk supplied at 3.6% butterfat and 3.3% protein.
“Away from the weather, markets are also proving as difficult as predicted. At our information meetings in early January we indicated that markets had weakened considerably. Unfortunately this situation has not improved,” Bergin said. “We are pleased that Glanbia Ireland has more milk in fixed price schemes than ever before.”
Application forms for Scheme 11 were sent to Glanbia suppliers last week.
Hopefully 30c will be the bottom, Glanbia board member tells ICMSA meeting