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Catherina Cunnane
Catherina Cunnane
Catherina Cunnane hails from a sixth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the firm during its start-up phase in 2015.
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Fixed price support package for dairy farmers

Glanbia Ireland (GI) has announced details of its new Fixed Milk Price Support Scheme.

The milk processor stated that it is “very conscious” of the “significant” challenges that some suppliers are facing due to the volume of milk contracted under Fixed Milk Price Schemes (FMPS).

Sean Molloy, Glanbia Ireland’s Chief Agribusiness Growth officer, said that as consequence of recent world events, there is “unprecedented” volatility in milk pricing, farm input costs and availability.

“This dynamic is proving to be particularly challenging for milk suppliers that have a high proportion of their milk contracted under FMPS,” he said.

As a result, its board has agreed on a number of voluntary options to help support participants.

Fixed Milk Price Support Scheme:

  • For all existing fixed milk price volumes above 35% of the supplier’s total supply in 2021, Glanbia will increase the fixed milk price it will pay on this milk to a base of 40cpl (VAT inclusive), plus constituents;
  • On top of this 40cpl, for relevant volumes, the processor will pay milk suppliers the sustainability bonus of 0.5cpl in 2022 and all seasonality payments – including any unconditional seasonality bonuses, and as relevant to particular suppliers, the liquid milk premium and autumn calving bonus.
  • To qualify for this 40cpl Fixed Milk Price in 2022, suppliers will have to commit the same FMPS volumes in 2023 and 2024 at a base milk price of 38cpl (VAT inclusive), plus constituents and relevant bonuses or payments.

The milk processor provided an example, involving a 750,000-litre supplier with 75% of their annual supply volume contracted under FMPS.

In this case, they will have 40% or 300,000 litres eligible for the milk price support scheme. This is the equivalent of €27,000 in milk price support.

To qualify, the supplier will be required to contract the same volume (300,000 litres) at 38cpl (incl VAT) in 2023 and 2024.

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Based on the average milk constituents for 2021, the expected average milk price paid on volumes in FMPS above the 35% threshold would be 45.55cpl during 2022. In addition to this, the supplier will receive other applicable payments.

Farm Input Cost Support Scheme:
  • Suppliers can also take part in the Farm Input Cost Support Scheme. This provides suppliers with a milk price prepayment of 5cpl on all volumes above the 35% threshold. This 5cpl support would be paid into the supplier’s Glanbia Trading Account in a lump sum in April/May 2022;
  • Glanbia will deduct the prepayment in six equal instalments from milk supply payments in March, April, May, June, July, and August of 2025 and 2026.

So, for instance, a supplier with 40% of their milk supplies contracted under Fixed Milk Price schemes will receive the farm input cost support prepayment of 5cpl on 5% of the contracted volumes in 2022.

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