Arrabawn introduces three-year Fixed Price Milk Contract

Arrabawn Co-op has today announced its first ever Fixed Price Milk Contract, with a three year offering to its members for 10% of their milk supply levels in 2016.

The deal will see suppliers have the opportunity to sign-up at 30.6c/L (at 3.60% fat and 3.30% protein), inclusive of VAT, across the eight month calendar from March to October this year as well as 2018 and 2019.

Any surplus arising from members not taking up on the offer will also become available to interested suppliers and offered to them in proportion to their 2016 volumes.

Announcing the contract, Arrabawn CEO Conor Ryan said that it will give suppliers price certainty across 10% of their milk for three years.

This is an opportunity for suppliers to hedge a portion of their supplies in what has the potential to be a volatile post Brexit period, with some turbulence expected in the short-term as arrangements bed down after Britain leaves the EU.

“On top of the positive milk price we are currently paying our suppliers, this signals the continued good health of the co-op following a sustained period of significant capital investment.

“That investment has very much consolidated the co-op and enabled us support our suppliers through a range of initiatives, including this new fixed price contract offering.”

The news of Arrabawn’s first Fixed Milk Price Contract comes after Dairygold Co-op this morning announced that it is to introduce a second Fixed Milk Price Scheme which will run over a three year period from March 1, 2017 to November 30, 2019 inclusive.

The scheme offers a fixed price of 30.75c/L, including VAT, set at reference milk constituents of 3.30% protein and 3.60% butterfat, including Full Balanced Scorecard and Sustainable Dairy Assurance Scheme (SDAS) bonuses.

Under the scheme a milk supplier delivering the 2016 average Dairygold milk constituents will receive a price of 34.05c/L.