Glanbia performs strongly in KPMG 2017 Milk Price Review

Glanbia Ireland performed strongly in the KPMG Milk Price Review for 2017, which was published by the Irish Farmers Journal on 5 July. The annual KPMG Milk Price Review measures the actual price paid for manufacturing milk over the full calendar year.

The KPMG Irish Farmers Journal Milk Price Review for 2017 confirmed that, in terms of net milk price paid, Glanbia Ireland paid the second highest milk price in Ireland, after the West Cork co-ops whose milk is processed by Carbery.

Key facts from the 2017 KPMG Milk Price Review include:

• After the deduction of collection charges and levies, Glanbia paid 1.5 cent per litre (cpl) more than Lakeland for manufacturing milk in 2017;
• Glanbia paid a net price that was 0.66 cpl higher than Kerry, 0.59cpl more than Arrabawn and 0.10 cpl more than Dairygold;
• Glanbia Ireland’s price was 0.3 cent per litre (cpl) above the weighted average for all KPMG participants (excluding Glanbia).
• The Glanbia price for 2017 does not include any Milk Price Support payments from Glanbia Co-op, as none were paid during the year.

Glanbia chairman Martin Keane said: “This consolidates Glanbia’s position as a strong, competitive payer for milk in Ireland, after the similar ranking achieved for four consecutive years. On top of a very competitive milk price, the Glanbia model also delivers considerable value growth for member suppliers.”

For example, in 2017 Glanbia milk supplier Members received Co-op share interest (dividends) and a plc share spin-out that are not included in the KPMG.

Martin Keane said that, in addition to a highly competitive milk price, Glanbia suppliers also benefit from an unrivalled range of Income Volatility tools - Co-operative Support Funds, Fixed Milk Price Schemes, MilkFlex Loans and the Glanbia Advance Payment (GAP) Scheme.

Value Distribution

A key point in any comparison between Glanbia and other milk buyers is that, in addition to milk price, Glanbia member suppliers benefit from the value created by the success of Glanbia PLC, which is distributed through the Co Op. Since 2013, Glanbia members have benefitted from value distribution totalling €717 million (based on a plc share price of €15.60).

Glanbia Ireland performance in 2016

• In addition to paying a strong milk price in 2017, Glanbia Ireland (GI) achieved a Profit-After-Tax of €43.1 million.
• 60% of this profit is owned by farmers through Glanbia Co-Op’s majority ownership of GI.
• Glanbia Ireland is committed to delivering consistent profits from year to year to underpin continuous investment in R&D and new market development, which is critical to the future of this growth industry.
• Expanding Glanbia suppliers are not required to pay any capital contribution and there is no deferred payment element.
• In order to facilitate the growth ambitions of milk suppliers and generate added value, GI has invested €359m in milk processing assets since 2013.

First Published 5 July 2018