Brexit Creates Uncertainty

Recent broken weather served as a great reminder to us of how lucky we were to have great weather in January and February which are usually two very tough months.

With a noticeable stretch in the evenings, it is a relief to be this far into the calving season with the ability to get animals out of yards and onto grass where they are happiest and most productive.

Animal welfare is paramount to Glanbia and our farmers and it is incumbent on all of us to maintain the very high standards we are recognised for in Ireland.

So far milk protein levels have been remarkably strong, reflecting early access to plentiful grass. Milk flows have also been strong but comparisons with last year are a little skewed because of storms and snow this time last year.

Dairy Market

On the dairy market front we have seen a significant reduction in the price of butter on the back of strong supplies in the last quarter of 2018.

At the same time Skim Milk Powder has increased in price for fresh product with the clear-out of intervention stock.

Unfortunately, this stock will be slow to reduce in the market and therefore is undermining products such as Fat Filled Milk Powder.

We welcome the seven straight increases in the Global Dairy Trade (GDT) auctions plus the uplift in the Fonterra milk price outlook. At least it brings their price back up to a range of 27 cpl to 29 cpl in Irish terms.

Uncertainty of Brexit

The other immediate and major factor is Brexit. The political uncertainty is causing economic uncertainty and a massive investment of resources to cover off the risks it may bring.

Overall, the market is ‘a tad’ lower than current prices would support but Brexit aside and if we close the gap with current market returns there seems to be some level of stability.

Moving Forward

It is full steam ahead in Glanbia Ireland. The business is just about fully re-structured as a single business versus the three businesses which were there in the past. The leadership team are very focused on performance and delivery of the strategy that is approved by the Board. We are readying our new dryer in Belview for the peak months so there is lots of activity to bring it in on time. Agribusiness is ramped up for the spring season so log on to GlanbiaConnect.com for some great promotions.

I wish everybody successful and safe farming over these busy spring months.

First Published 19 March 2019