Lakeland offers fixed milk price scheme

With few positives coming in the global dairy markets, another Irish co-op has offered a fixed milk price scheme.

As exclusively revealed on www.farmersjournal.ie last weekend, Lakeland has become the latest co-op to offer a fixed milk price scheme.

In a letter sent to suppliers last week, Lakeland’s farmers will be able to lock in either 5% or 10% of their milk supply at either 28.5c/litre or 29.5c/l for 31 months from 1 June 2016 through to the end of December 2018. The price, which is VAT inclusive at 5.2%, is based on 3.3% protein and 3.6% fat and “for milk achieving all quality base requirements”.

The 28.5c/l is for milk from April to September and the 29.5c/l price is for milk collected from October to March.

A farmer can supply either 5% or 10% of their milk pool. Once a farmer has signed up to the fixed milk supply agreement, they are committed to supplying specific volumes in specified months of the year.

If a farmer does not reach the specific monthly levels, allowances can be made but litres can be carried over from one month to the next.

Farmers who wish to take up the scheme must reply to the co-op by Friday 20 May.

Lakeland has also offered a scheme to farmers in Northern Ireland, making it the first co-op to do so.

Table 1 shows the details of the base price at comparable solids (3.3% protein & 3.6% fat) for five of the big processors.

The table also shows a price closer to actual prices farmers will receive based on including bonuses and milk solids improvements most farmers have made.