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Glanbia Ingredients Ireland (GII) announced the two schemes this Thursday, saying suppliers can apply to participate in one or both schemes from early January.
Fixed milk price margin scheme
One contract includes margin protection component and is called “phase 8 fixed milk price margin scheme” by Glanbia. It will run for three years from 1 January 2017 to 31 December 2019.
The scheme uses a reference price of 28.54c/l excluding VAT at 3.6% fat and 3.3% protein, which will be adjusted in line with the movement of farm input costs, using 2016 as the base year.
Based on its Glanbia forecast that input costs will rise by 0.62c/l excluding VAT in 2017, GII will therefore pay 29.16c/l excluding VAT for milk supplied under the scheme next year. If the actual input cost movement for 2017 is above or below the forecast, GII will spread the adjustment across 10 months in 2018. Further similar adjustments will operate for the next two years.
On the milk price side, there will be no effect if the open market price stays between 25.98c/l and 31.98c/l excluding VAT. There will be an adjustment of 0.5c/l for each 1c/l movement in the market price outside this range. For example, if the market price excluding VAT goes up to 32.98c/l, the price paid under the scheme will rise by 0.5c/l.
GII said it would give priority to participants in previous phases 3 and 4 of its fixed milk price schemes and reserve 10% of the volume available under the scheme for new entrants.
Fixed milk price scheme
The other contract opening in the new year is called “phase 9 fixed milk price scheme”.
It will run for the full calendar year of 2017 only and pay a unique milk price of 30.1c/l excluding VAT.
The price of milk supplied under both schemes will be adjusted for constituents in the usual way. Glanbia co-op members will also receive top-ups from the co-op for the milk supplied under the schemes, if available.
There is no individual limit on the volume a farmer can apply for under either of the schemes. While GII does not publish information on the supply covered by each fixed price scheme, it said on Thursday that it had collected 1.7bn litres since starting the schemes in 2011.
A spokesman for Glanbia told the Irish Farmers Journal that the volumes available under phase 8 and 9 would be higher than under any previous scheme.
The Irish Farmers Journal reports milk prices excluding VAT.
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