Glanbia performs strongly in 2019 KPMG Price Review

The KPMG Irish Farmers Journal Milk Price Review for 2019 confirmed that Glanbia delivered the highest milk price of all the large-scale dairy processors.

Glanbia’s strong performance saw it record a net milk price that was the highest in Ireland after the West Cork Co-ops, whose milk is processed by Carbery.

This consolidates Glanbia’s position as a strong, competitive payer for milk, with a similar ranking achieved in the review over the past six consecutive years.

Price

After the deduction of collection charges and levies, Glanbia paid 33.12 cent per litre (cpl) for manufacturing milk in 2019.

Glanbia’s price was estimated to be approximately 0.41 cpl above the weighted average for all KPMG participants (excluding Glanbia).

The KPMG price reported for Glanbia for 2019 does not include the 2019 Trading Bonus Scheme or the Glanbia Loyalty Scheme (GLS), which paid out a combined 0.55 cent per litre.

• The Trading Bonus paid up to 0.75 cpl to farmers that had over 7cpl of trade with Glanbia.
• The GLS paid €30 per tonne of dairy feed purchased. Both schemes were included in the 2018 Milk Price Review but are excluded from the Glanbia price reported for 2019.

The Glanbia price in the main KPMG Milk Price Review table includes the benefit of constituents. However, when the net prices paid are adjusted to standardise for the level of solids in the milk delivered to each processor, Glanbia continues to perform strongly and retains its ranking of 2nd place behind the Co-ops supplying Carbery.

Note – The average price paid by Kerry Group PLC includes a bonus payment of 2.85 cpl (excl VAT) paid in January 2020 and based on the average annual milk supplied for years 2015 to 2019. The price paid by Kerry is adjusted to take this in to account in the table above.

KPMG

The annual KPMG Irish Farmers Journal Milk Price Review is the only independent and audited measure of milk price in Ireland. It measures the actual price paid for manufacturing milk over the full calendar year.

Aurivo and Arrabawn did not participate in the 2019 Milk Price Review.

The KPMG price quoted for Glanbia excludes payments for liquid milk.

Co-op Supports

If Glanbia Co-op supports are excluded for 2019, Glanbia retains its rank of second place behind the Co-ops supplying Carbery with the inclusion of the Glanbia Loyalty Scheme and Trading Bonus Scheme, both of which are funded by Glanbia Ireland.

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 Glanbia plc, which is distributed through the Co-op.

In 2019, the total payments to Co-op Members amounted to €40.5 million including the Trading Bonus Scheme. Over 5,600 Members benefited from the scheme in 2019, with a total of €13.8 million paid out to Members.

The Glanbia model returns value through milk price and shareholder returns.

Co-op dividends are not included by KPMG and this delivered an average payment for Member milk suppliers of €1,150.

In addition to a highly competitive KPMG milk price in 2019, Glanbia suppliers also benefitted from an industry leading range of Income Volatility tools, including Fixed Milk Price Schemes, MilkFlex Loans, FundEquip and the Extended Credit Scheme.

First Published 17 November 2020