Glanbia Ireland (GI) has faced pressure from suppliers who have large volumes of their milk locked into fixed milk pricing schemes.
Rising input costs and stagnant yields have put enormous pressure on these farmers’ incomes.
Glanbia Ireland said it is keenly aware of the significant challenge facing these suppliers. Sean Molloy, Glanbia Ireland’s Chief Agribusiness Growth Officer, described the challenges arising from recent world events, unprecedented volatility in milk prices, farm production costs and availability.
“These dynamics are proving particularly challenging for milk suppliers who have contracted a high proportion of their milk,” he said.
“To address the challenges faced by farmers with larger contract volumes under FMPS, the Glanbia Ireland Board have agreed on a number of voluntary options to support participants.”
Fixed milk price support:
- For all existing fixed price milk quantities in excess of 35% of the supplier’s total supply in 2021, Glanbia will increase the fixed price milk paid for that milk on a basis of 40 cpl (including VAT) plus components.
- In addition to these 40 cpl, milk suppliers will receive the 0.5 cpl sustainability bonus in 2022 for relevant volumes and all seasonality payments – including all unconditional seasonality payments and, where relevant for specific suppliers, the liquid milk payment and the fall calving payment.
- To qualify for this 40cpl fixed milk price in 2022, suppliers must commit the same FMPS volumes in 2023 and 2024 at a base milk price of 38cpl (inclusive of VAT) plus ingredients and relevant bonuses or payments.
As an example, Glanbia said that a 750,000 liter supplier with 75% of its annual supply volume contracted under FMPS will claim 40% or 300,000 liters for the milk price support scheme. This corresponds to milk price support of 27,000 euros. To qualify, the supplier must contract the same volume (300,000 liters) at 38 cpl (including VAT) in 2023 and 2024.
“Based on average milk components for 2021, the expected average milk price paid for quantities in FMPS above the 35% threshold would be 45.55 cpl in 2022. In addition, the supplier will receive other applicable payments,” it said.
Utility Expense Support Program:
Glanbia Ireland also emphasized that suppliers can also participate in the Farm Input Cost Support Scheme.
As a result, suppliers receive a milk price advance of 5 cpl on all quantities above the 35% threshold. This 5cpl support would be deposited as a lump sum into the supplier’s Glanbia trading account in April/May 2022.
The advance payment will be deducted in six equal installments from milk delivery payments payable by Glanbia to the supplier in March, April, May, June, July and August 2025 and 2026.
https://www.independent.ie/business/farming/dairy/glanbia-offer-supports-to-farmers-in-fixed-milk-price-schemes-41503141.html Glanbia offers farmers support under fixed milk price schemes