Glanbia Ireland has launched its first fixed price milk scheme for suppliers based in NI.

The company, which operates as Glanbia Milk in NI, will offer suppliers a fixed price of 28p/litre over a three-year period starting from 1 January 2018.

The Glanbia scheme has no upper limit on the volume of milk that suppliers can commit under the agreement.

However, to avail of the fixed price of 28p/l, suppliers must commit a minimum of 10% of their 2017 supply.

Within the terms of the agreement, a “market adjustment” has been built into the scheme should milk prices increase.

The market adjustment operates on the premise that should the open market price increase above 30p/l, the fixed scheme price will increase by 0.5p/l for every 1p/l increase in the market price.

Launched at a recent meeting of Glanbia suppliers in NI, the proposed scheme was received positively by suppliers. Glanbia will outline full details to suppliers in the coming weeks.

Bonus

Meanwhile, it is understood that the future of 0.6p/l year-round bonus paid on top of base price, referred to as the “Fermanagh bonus”, is likely to be reviewed.

Indications suggest that the 0.6p/l would be rolled into the normal base price, simplifying payment.

MPI

Elsewhere, the latest Milk Price Indicator (MPI) from the Ulster Farmers Union has been revised downwards by 0.39p/l to 28.41p/l.

The price revision is mainly in response to the latest GDT auction which saw index price drop 3.4%.

The MPI is calculated based on commodity markets and is a forecast price to reflect what markets can return to farmers within the next one to two months.

After an 11% drop in UK butter prices during November, the Actual Milk Price Equivalent (AMPE) price has been reduced to 29.2p/l.