Glanbia information meetings in full flow
A NEW seasonality bonus for creamery milk suppliers to help flatten the milk curve were among the topics highlighted as Glanbia hosts a series of regional information meetings for farmers.
Market outlook, growth, new entrants and the economic footprint from the €1 billion paid to farmers for milk in 2019 were among the topics discussed.
Glanbia Ireland Chief Executive Jim Bergin highlighted the growth in the milk pool to 2.9 billion litres in 2019 which has been delivered by farmers with strong economic benefits for their local communities.
Co-op Members and suppliers heard milk supply growth in the coming years would be more moderate, with farmers continuing to deliver strong increases in solids. “We are very conscious of our environmental responsibilities and so too are our suppliers. Our environmental standards are key to all our plans for the future,” said Jim Bergin.
He highlighted that it was too early in the year to make predictions in relation to the direction of milk price, with many factors currently proving influential, including the devastating fires in Australia, disputes and trade wars.
Overall moderate global milk supply growth was delivered in 2019, which is expected to be slightly higher in the first half of 2020. Jim Bergin told farmers the indications were that the market appeared solid at current levels.
Some of the new developments highlighted at the meetings included:
- There will be no capacity charge or levy for the next phase of forecasted milk growth by existing suppliers.
- New entrants:
- From 2020, new entrants have a choice on how to make a “capacity contribution”.
- Greenfield start-ups can contribute 0.5cpl on all milk or trade above 3cpl in year 1 and >5cpl in years 2-5.
- New units can contribute 1.0cpl or trade above 3cpl in year 1 and >5cpl in years 2-5.
- Suppliers with less than 250,000 litres per year are exempt.
- A seasonality incentive has been confirmed with a new Early Calving Bonus and Late Supply Bonus for creamery milk suppliers:
- A new Early Calving Bonus (ECB) of 4 cpl (including VAT) will be paid on all milk supplied by creamery milk suppliers in January, while February milk will qualify for an ECB payment of 3 cpl (including VAT);
- A Late Supply Bonus (LSB) of 2 cpl (including VAT) will be paid on all milk supplied by creamery milk suppliers in December 2020;
- Both the ECB and the LSB will be adjusted to reflect the constituents of the milk delivered.
- A strong emphasis will be placed on driving value-added growth and growing new markets, with over 100 people now working to market GI products in regions including China, US, Middle East and Africa.
- Investment was taking place in R&D to increase capabilities, with the new €15m R&D centre in Ballyragget, Co Kilkenny now approved for planning.
- Glanbia Co-op highlighted in 2020 all milk supplier Members will receive a 0.4cpl payment each month on all milk supplied as their ‘Share of GI profit’. It will be adjusted to reflect constituents.
- In addition, details of the Trading Bonus Scheme for 2020 were announced. (Full details available on GlanbiaConnect.com)
The series of regional meetings are taking place until January 29 with full details available here.
First Published 16 January 2020