Glanbia Ireland, which processes 2.4bn litres of milk, has launched a five-year fixed milk price scheme combined with a feed discount scheme for dairy farmers. The voluntary scheme will pay a fixed base milk price of 31c/l including VAT (29.33c/litre excluding VAT) at base constituents of 3.6% butterfat and 3.3% protein.

In addition, participants in the scheme have the option to avail of a €30/t discount on dairy feeds (compound feeds and coarse rations) they buy from Glanbia Ireland.

I’m sure this is a scheme that will be welcomed by many farmers during a period of significant political and economic uncertainty

Glanbia chair Henry Corbally said: “The Glanbia loyalty scheme for milk and dairy feed prices is another international first for Glanbia. I’m delighted that we are in a position to provide milk suppliers with a guaranteed milk price for a period of five years, extending well beyond what is currently offered in any other jurisdiction. I’m sure this is a scheme that will be welcomed by many farmers during a period of significant political and economic uncertainty.”

100% feed purchase commitment

Participating suppliers will be required to purchase 100% of their feed requirements for the dairy cow herd each year over the five-year period of the scheme.

The base milk price is fixed for the duration of the scheme, which is set to begin on 1 January 2018 and run for a five-year period to 31 December 2022. It is open to all Glanbia Ireland suppliers in the Republic of Ireland with a milk supply agreement.

Farmers who wish to participate in the scheme may sign up only to the fixed milk price, but Glanbia will give preference to applicants who wish to sign up to both feed and milk.

The minimum amount a farmer has to put in the scheme is 10% of milk supply. There is no maximum. However, this is dependent on volumes applied for in the overall scheme.

Traceability

Sean Molloy, director of strategy and supply development with Glanbia Ireland, said: “As well as huge risk management benefits for farmers, the new Glanbia loyalty scheme offers customers unrivalled traceability. The establishment of this cohort of farmers allows Glanbia Ireland promote the closed-loop procurement concept in terms of product claims and marketing initiatives.”

This scheme is separate to any loyalty payments that Glanbia co-op decides to pay on purchased feed.