A total of 250 farmers are set to retire from milking as part of a five-year retirement scheme introduced by Glanbia, Agriland can confirm.
The scheme will run from 2022-2026, inclusive, and is expected to cost around €2.2 million per year or €11 million over the course of the five years.
As a result of the scheme’s uptake, in excess of 1.5 million litres of processing capacity per week, during the peak period, will now be delivered, according to a Glanbia spokesperson. On an annual basis, this freed-up processing capacity reaches 75 million litres.
The number of applicants to the scheme exceeded Glanbia’s expectations, according to the company’s chief ingredients and agri officer, Seán Molloy.
He told Agriland:
“We thought that 180-200 might, ultimately, land into the scheme. When it closed, we had 250 applicants who qualified to take part.
“This was ahead of our guestimate – which is all that really was – at the time when we launched the scheme,” he said.
The typical farmer taking up this retirement scheme was producing about 300,000L/year, he said, and, age-wise, tended to be at the higher end of Glanbia’s cohort of suppliers.
“The average age of farmers taking up the scheme is 65, whereas the average age of a typical Glanbia supplier is 56. So it tended to be our lower-scale operator who is at the higher age of the profile,” he said.
Successful farmers were informed in early March.
Voluntary scheme
This voluntary “once-off” scheme was launched in April 2021 as part of the company’s peak-supply-management policy.
This was one – of several – measures introduced in response to the delayed development of the €140 million cheese-production facility in Kilkenny due to a lengthy legal challenge.
It offered a five-year incentive for farmers who wanted to exit milk production, and it helped to ease the peak-milk pressure on Glanbia until the cheese facility issue was resolved – in one way or another.
The closing date for applications to the scheme had to be extended from July 2021 to January 2022 due to feedback from farmers that considering such a “significant decision” required more time.
The scheme will be funded through a contribution of 0.075c/L (VAT exclusive) on all milk supplies from existing suppliers.
Farmers accepted onto the scheme will receive a monthly retirement income for the next five years.
A minimum payment of €5,000 per annum is available and a maximum payment of €15,000 per annum is available, amounting to a maximum of €75,000 over the five years.
According to a Glanbia spokesperson, based on the successful applicants, the retiring farmers will receive between €9-10,000/year, on average, over the five-year term.