This is a subscriber-only article
Speculation is mounting that Glanbia will impose a reference year to limit its milk suppliers to a certain level of peak milk production in the coming years.
The Irish Farmers Journal understands that among the topics for discussion at Glanbia’s board meeting on Thursday is how it will manage peak milk processing over coming years.
There are rumours that 2019/2020 will be a reference year for Glanbia suppliers and farmers will be allowed a tolerance of maybe 3% above this reference volume at peak supply between April and June.
The proposal would be that any milk produced over and above this peak reference would be paid for at a different price than standard base price. This effectively sends a signal to suppliers about managing peak milk.
We are working very closely already with a number of processors. We have plans for managing capacity and product diversification
Speaking to the Irish Farmers Journal this week Glanbia chair John Murphy said: “All matters are up for discussion as we try to meet the needs of our suppliers. The board will look at and discuss all options open.”
When pressed on whether Glanbia was looking to work with other processors, Murphy said: “We are working very closely already with a number of processors. We have plans for managing capacity and product diversification and anything the board decides to manage options will be short-term. We’ve taken in 1.6bn additional litres from our suppliers over the last seven years so we’ll manage the current situation.”
Murphy suggested the new dryers that were invested in at Belview were working well and any commissioning issues were well and truly sorted. The third dryer installed in Belview only works at peak for around 11 weeks to handle peak milk flow. Over the last number of years, Glanbia has invested over €500m in increasing processing capacity.
SHARING OPTIONS: