Glanbia Ireland Fixed Milk Price Scheme – Phase 18

Glanbia Ireland has launched the latest phase of its Fixed Milk Price Scheme which includes an innovative feed price adjuster to help protect against input cost volatility.

The Fixed Milk Price Scheme ­(Phase 18) will pay a base milk price of 42 cent per litre (cpl) (including VAT) for 2022 at 3.6% fat and 3.3% protein, with a price of 40cpl (including VAT) for 2023 and 2024.

The voluntary scheme runs from 1 March 2022 until 31 December 2024.

Click below to view the Fixed Milk Price Scheme – Phase 18 brochure:

 

Feed Price Adjuster

Glanbia Ireland has established a feed price adjuster which will increase the Fixed Milk Price under this scheme in the event that feed prices rise from current levels.

The feed price adjuster tracks recognised international feed price indices such as the Matif Wheat, The Chicago Board of Trade (CBOT) Corn and CBOT Soymeal. Under the mechanism, in the event that feed prices rise then the milk price paid under Scheme 18 will also increase to reflect this.

For every €50/tonne increase in feed prices, the milk price paid out under this scheme will rise by 0.5cpl (including VAT) or part thereof on an annualised basis. For example, if the actual price of these commodities increased by €25/tonne, then the milk price for the period would be increased by 0.25cpl (including VAT). The feed adjuster applies from 1 July 2022 to 30 December 2023.

Commenting on the scheme, Seán Molloy, Chief Ingredients and Agri Officer, said over the past decade there has been strong interest amongst suppliers in Fixed Milk Price Schemes as they have helped to protect against price volatility.

“On average, over the past 10 years up to and including 2021, such schemes have outperformed the market.

“This latest phase of the Scheme has evolved in recognition of the current marketplace dynamics and the input volatility that suppliers and businesses have been weathering in recent months. This price is a strong offering in a volatile international marketplace and offers the opportunity to fix a portion of milk supply to help protect against price volatility.

“Despite the current very favourable market returns, it is important that farmers give appropriate consideration to protecting their business against any potential future market turns. The feed price adjuster provides an additional level of security as it will track feed price indices.”

Other details of the scheme, include:

• The Fixed Milk Price will be adjusted for constituents in 2022, 2023 and 2024. For instance, based on the average constituents of GI suppliers in 2021, a supplier on average would receive a price of 48.82cpl for 2022 including adjusted constituents and applicable payments with a price of 46.57cpl and 46.57cpl possible in 2023 and 2024 on the same basis. This works out at over 47cpl over the duration of this scheme;
• Any applicable payment such as Seasonality, Sustainability Action Payment, Liquid premium, Autumn Calving Scheme payment or other relevant payments to qualifying suppliers will be paid on top of the Fixed Milk Price payment;
• There will be no reduction in milk price paid if feed prices reduce as defined by the international indices outlined;
• The feed price adjuster will be paid out at the end of each year. For example, for 2022, it will be paid in the first quarter of 2023;
• The feed price adjuster will apply for the period from 1 July 2022 to 30 December 2023;
• The feed price adjuster tracks global indices - there is no link to the volume, type or source of feed used.

 

Application pack now available online

Fixed Milk Price Scheme – Phase 18 application packs are posted and now available online at GlanbiaConnect > MyAccount > MyDocumentCentre > FixedMilkPriceSchemeDocuments.

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: 06 April 2022