Fixed Milk Price support schemes

Glanbia Ireland (GI) is very conscious of the significant challenge that some suppliers are facing as a result of the volume of milk contracted under Fixed Milk Price Schemes (FMPS).

These schemes have operated for over a decade and have served suppliers well in addressing volatility in dairy markets.

Sean Molloy, Glanbia Ireland’s Chief Agribusiness Growth officer, said that as a 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.

“In an effort to help address the challenges faced by farmers with larger volumes contracted under FMPS, the Board of Glanbia Ireland have agreed 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 paid on this milk to a base of 40cpl (VAT inclusive), plus constituents.
• On top of this 40cpl, for relevant volumes milk suppliers will be paid 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.
• In order to qualify for this 40cpl Fixed Milk Price in 2022, suppliers will be required 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.

So for example, a 750,000 litre supplier with 75% of their annual supply volume contracted under FMPS 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. In order to qualify, the supplier will be required to contract the same volume (300,000 litres) at 38cpl (incl VAT) in 2023 and 2024.

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.
• The prepayment will be deducted in six equal instalments from milk supply payments due to be paid by Glanbia to the Supplier 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.

Application pack available online

The Fixed Milk Price & Input Cost Support Scheme application packs are available online at Glanbia Connect > My Account > My Document Centre > Fixed Milk Price Scheme Documents > Milk Scheme Application.

Login in or register here www.glanbiaconnect.com/login

If you require any further information, please contact your local Glanbia Ireland Milk Supply Manager.

First Published: 29 March 2022