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Wednesday, December 13, 2017
 Scramble for Milk Slows Glanbia's US Cheese Output  

Tight milk supplies in parts of northern America have forced Glanbia's cheese volumes into a further decline, although not by enough to throw the group off-course from meeting profits guidance.

The Irish-based company, which generates about 70% of its profits in the US, warned of "continued competitive pressures" in securing milk for its Idaho-based cheese operations.

The squeeze had forced "somewhat lower" cheese volumes in the first half of 2011, even below those a year before when a major refurbishment forced one of its Idaho plants into a go-slow.

Idaho milk prices have risen by 7% over the last month and by more than one-third over the past year, US Department of Agriculture data out late on Wednesday showed, although these rises were in line with the national average.

Nonetheless, the group said its US cheese business would show a "satisfactory performance" when the company in August unveils half-year results.

And, while flagging an E8bn hit to pay for a cost-cutting drive at its consumer products division, Glanbia stood by a forecast of 11-13% growth in full-year earnings per share, on an underlying basis, helped by solid performances in Irish dairy and agribusiness divisions.

Market Reaction
Analysts at NCB Stockbrokers cut their forecast for Glanbia's earnings per share this year to 41.2 euro cents, from 43.7 euro cents, citing the weakness of the dollar against the euro, in which the dairy group reports.

Nonetheless, this implied earnings growth ahead of management guidance, and NCB stuck with a "buy" rating on Glanbia shares.

At Davy Stockbrokers, John O'Reilly stuck with an "outperform" rating on the stock, noting signs of a resolution to Idaho's milk supply squeeze.

"Milk supply in Idaho is accelerating, while the milk pricing environment should be easier with the relative change that has occurred in US cheese and butter prices," Mr. O'Reilly said.

Source: Agrimoney

http://www.agrimoney.com/news/scramble-for-milk-slows-glanbias-us-cheese-output--3315.html


Posted on Thursday, June 30, 2011 (Archive on Thursday, July 07, 2011)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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