Farmer suppliers to the four west Cork co-ops are being offered a three-year fixed milk price scheme by their milk processor, Carbery Group.

The scheme gives Bandon, Barryroe, Drinagh and Lisavaird suppliers the option of a fixed milk price for between 10% and 20% of their 2014 supply. It applies to milk supplied between 1 April 2015 and 31 December 2017.

After Glanbia and Kerry, Carbery is the third processor to offer a three-year fixed milk price scheme.

The fixed price quoted in the Carbery scheme includes the co-op’s bonus for milk with a somatic cell count of under 200,000. This bonus is 0.5c/litre in the summer and 0.88c in the winter months.

When the VAT and SCC is stripped out of the Carbery price, it equates to 30.44c/l, slightly lower than the 31c/l offered by Glanbia and the 31.185c/l from Kerry.

However, the three schemes are not directly comparable, given that Glanbia’s has a number of adjustment mechanisms to prevent both the farmer and the customer from being too far out of line with the free market price. In the case of Kerry and Carbery, the fixed milk price is set for the three-year period, regardless of what happens the free market price. Market sentiment has also moved since the Kerry and Glanbia prices were set.

Speaking at a series of IFA regional dairy meetings this week, IFA dairy committee chairman Sean O’ Leary urged more dairy processors to give their suppliers the option of a fixed milk price scheme to help cope with market volatility. Aurivo’s Aaron Forde told the Carrick on Shannon meeting his co-op would explore supplier interest in a fixed milk price over the coming months.