Some 1,727 Glanbia suppliers will receive notice of an allocation from the processor’s Reserve Pool by the end of this week, Glanbia Ireland has confirmed.
This translates to 89% of applicants, the processor says.
A total of 1,727 suppliers, or 89% of applicants, will receive notice of an allocation from the Reserve Pool by the end of this week.
The mechanism, announced earlier this year, back in March, will see suppliers needing to rein in increases in milk supply during peak season next year and in 2023.
However, the move also saw the creation of a “Reserve Pool” that will allocate additional peak volumes to ‘exceptional cases’ where, for example, there has been a notifiable herd disease outbreak in the base period.
Sean Molloy, chief agribusiness growth officer with Glanbia Ireland said:
“Due to a combination of internal investments, good uptake of the Voluntary Retirement Scheme and improved arrangements with third parties, a reasonable volume of peak capacity was available to the Reserve Pool.”
In some cases that received no Reserve Pool allocation, it was determined that the applicants already had sufficient 2022 to 2024 peak milk volumes to meet their projected requirements, the processor said.
Molloy added: “The process was a huge task for the team over the past months with over 2.3 million data points included in the model. But we are now on track to have the results issued by the end of the week.”
Glanbia Ireland confirmed that all applicants will receive a text as soon as the information is available online in the My Documents section on its site, with staff also available to deal with queries.
In late March 2021, in changes to the supply measure, each milk supplier was afforded peak supply growth of 2.5%, 5% and 10% depending on supplier’ scale and profile.
Given the impact of this policy on some milk suppliers, the Glanbia Board agreed to the creation of a “Reserve Pool” which aims to address, in so far as possible, situations where a farm business is materially impacted by the requirement to introduce a limit, the processor said.
As such, milk volumes from the Reserve Pool were allocated to individual milk suppliers based on defined criteria in a process overseen by PwC.
Almost 2,000 milk suppliers representing 37% of Glanbia’s supply base and 47% of its total milk pool submitted an application for an allocation from the Reserve Pool.
With the allocation now complete, Glanbia stressed that there is no additional capacity now available over peak – meaning no guarantee the volumes in excess of peak allocations will be able to be processed.
Milk supplied in excess of the peak volumes allocated will incur a price deduction during 2022, 2023 and 2024, Glanbia Ireland warned.
The peak supply management policy will be reviewed annually by Glanbia Ireland’s board, and “may be impacted by the outcome of the current Supreme Court challenge to the planning permission granted for the continental cheese facility in Belview”, the processor concluded.