Lakeland Dairies is set to introduce a new milk payment scheme that will see milk produced over a reference volume in April, May and June penalised by 4 c/l in the Republic of Ireland and by 3p/l in Northern Ireland. The move by the board of Lakeland is an attempt to allow continued expansion by Lakeland suppliers but at different prices.
What’s surprising is that apart from ongoing development on existing sites, there is no processing plan to allow the co-op move away from this proposed new pricing structure. In effect, the Irish Farmers Journal’s preliminary analysis suggests, assuming a 3% supply increase continues, there will be €3m to €4m taken out of farmers’ milk cheques because it is going to buy milk cheaper at peak and any new push to the shoulders is relatively small. Suppliers could live with this in the short term if they thought the processing investment would happen but that doesn’t seem to be the case.