Glanbia Ireland launch new 5-year Milk & Feed Loyalty Scheme

Glanbia Ireland has announced details of a new Milk & Feed Loyalty Scheme (Glanbia Loyalty Scheme), including a five-year fixed milk price element and a €30 per tonne loyalty bonus on concentrate dairy feeds from GAIN Animal Nutrition products.

• Scheme is first ever five-year Milk Price Volatility tool
• Fixed Base Milk Price of 31 cpl (including VAT) & €30 per tonne loyalty bonus on dairy feeds from GAIN Animal Nutrition
• “Closed loop” provides unrivalled traceability for customers

This voluntary Scheme will pay a Fixed Base Milk Price of 31 cent per litre (including VAT) at base constituents of 3.6% butterfat and 3.3% protein plus a Feed Adjustor valued at between 2 to 3 cent per litre (cpl) for those participating in the dairy feed element of the Glanbia Loyalty Scheme (the Feed Adjustor amount varies depending on the volume of milk committed to the scheme and the level of feed usage).

In addition to availing of the Fixed Base Milk Price (31 cpl inc VAT), participants in the new Scheme can also avail of an optional dairy feed component, with a €30 per tonne loyalty payment on concentrate dairy feeds from Glanbia Ireland’s GAIN Animal Nutrition range. Glanbia Ireland milk suppliers that avail of the feed option will have priority to the milk pool available in the loyalty scheme.

Glanbia Chairman, Henry Corbally said: “The Glanbia Loyalty Scheme for milk and dairy feed prices is another international first for Glanbia. I’m delighted that we are in a position to provide milk suppliers with a guaranteed milk price for a period of five years, extending well beyond what is currently offered in any other jurisdiction. I’m sure this is a scheme that will be welcomed by many farmers during a period of significant political and economic uncertainty.”

Sean Molloy, Director of Strategy and Supply Development with Glanbia Ireland, said that; “As well as the risk management benefits for farmers, the new Glanbia Loyalty Scheme offers customers unrivalled traceability. The establishment of this cohort of farmers allows Glanbia Ireland promote the ‘closed loop’ procurement concept in terms of product claims and marketing initiatives.”

“A ‘closed loop’ offers customers an exceptionally high level of assurance around the traceability and high quality of our dairy products, with all milk produced from grass and feeds sourced from our own Glanbia Ireland feed mills. This offers unrivalled assurance on the quality and integrity of the products.”

Key elements of 5-year Glanbia Loyalty Scheme

• The 5-year Glanbia Loyalty Scheme will pay a Fixed Base Milk Price of 31 cent per litre (cpl) at 3.6% butterfat and 3.3% protein (including VAT) for five years.
• For those participating in the feed element of this scheme, the additional Feed Adjustor of between 2 cpl and 3cpl will be paid by way of a loyalty payment of €30 per tonne on feed purchased under the scheme (the actual value of the Feed Adjustor depends on the volume of milk committed to the scheme and the level of feed purchased each year).
• The base milk price is fixed for the duration of the scheme - there will be no mechanism to adjust (up or down) for farm input cost movements, or movements in the market price.
• Constituents above the base will be paid for at the Scheme price.
• The Scheme will commence on 1 January 2018 and run for a five year period to 31 December 2022.
• The Scheme is open to all Glanbia Ireland suppliers in the Republic of Ireland with a Milk Supply Agreement.
• Suppliers can elect to participate in the milk price element only of the Glanbia Loyalty Scheme if they wish. However milk volumes will first be allocated to applicants for both offer components (i.e. feed and milk).
• Suppliers participating in Phase 1 of the Glanbia Loyalty Scheme will be given priority to any future equivalent schemes for 75% of the volume of milk they are allocated under this scheme.
• For qualifying applicants, Milk Supply Agreements (MSA’s) will automatically be extended to cover the period of the MFL Scheme.

Feed component

• The dairy feed offered under the Glanbia Loyalty Scheme extends to all Glanbia Ireland’s range of dairy compound feeds and coarse rations – but excludes straights.
• Participating suppliers will be required to purchase 100% of their dairy feed requirements [for all milking animals in the herd] each year over the five year period of the Scheme (straights and compound feeding stuffs).
• Participating suppliers will receive a standard loyalty payment of €30 per tonne on all compound and coarse dairy feed purchased from Glanbia Ireland (scheme payment excludes straights).
• The “closed loop” feed loyalty payment will be paid on an annual basis in Q1 of the year following the feed purchases.
• Suppliers participating in this Scheme will receive any loyalty payments that Glanbia Co-op elect to pay on purchased feed, fertiliser etc.
• In the event that the Feed Component of the 5 Year Glanbia Loyalty Scheme is over-subscribed the following prioritisation will be initiated;
  • Suppliers that have the greatest level of dairy feed purchase loyalty relative to their dairy scale [i.e. purchasing percentage] over the last three years (2015, 2016 and 2017) will get priority allocation.

About Glanbia Ireland

Glanbia Ireland is Ireland’s leading diary & agri-business Company which owns celebrated consumer and agri brands such as Avonmore, Kilmeaden Cheese, Premier Milk, Wexford, mymilkman.ie and GAIN Animal Nutrition. It exports high quality dairy and agri ingredients as well as branded products to over 60 countries.

Drawing from a 2.4 billion litre milk pool supplied by 4,800 family farms, Glanbia Ireland produces top quality dairy products from grass fed, pasture raised dairy herds. Combined with locally produced grains and state of the art milling, this unique agri platform provides for fully traceable and sustainably produced products.

Glanbia Ireland is a joint venture 60% owned by Glanbia Co-op and 40% owned by Glanbia plc. Established in July 2017, it combines Glanbia Ingredients Ireland, Glanbia Consumer Products and Glanbia Agribusiness. With annual revenue of €1.5 billion, Glanbia Ireland has 11 processing plants, 53 agri branches and over 1,800 employees.

First Published 15 August 2017