Aurivo is to introduce a three-year, fixed-price contract option to its dairy shareholders, according to the co-op’s dairy processing General Manager Eoghan Sweeney.
“The new scheme will be launched during the fourth quarter of 2015,” he said.
“Each contract will be based on an agreed quantity of processed product, which can then be worked back in terms of milk volumes supplied. The scheme will allow participating farmers to fix a specific proportion of their milk pool at an agreed price.
“There will be a fair degree of flexibility in terms of when the milk is actually supplied.”
Sweeney confirmed that it is too early to confirm the farmgate price, around which the initial contracts will be based.
“We will make these figures public later in the year.”
Sweeney said that the milk volumes supplied to Aurivo have risen by 10%, compared with this time last year.
“The weather has been quite cool in the north west over the past number of days. And this may well be acting to reduce daily milk yields.
“We have surveyed our members three times in the recent past, regarding their milk supply intentions. On the back of the information secured, we are projecting a 25% in our total milk pool over the next three years.”
Sweeney pointed out that an investment in new technologies and lean manufacturing capabilities at Ballaghaderreen will allow Aurivo to process this extra milk without a requirement for additional stainless steel.
“Working with Ornua, we are confident of finding buyers for all of this extra milk. The problem at the moment is the weak price that is available for all dairy products on world dairy markets,” he said.
Aurivo paid 30.5c/L, including VAT, for milk supplied during April.