Glanbia Ireland (GI) has confirmed that the closing date for applications for its new support scheme for suppliers in fixed milk-price contracts is this week.
The processor decided to extend the closing date by one week until Friday (April 22).
The initiative was unveiled in late March in response to the significant challenge that some milk suppliers are facing as a result of the high volume of milk they have committed to Fixed Milk-Price Schemes (FMPS)
Glanbia has operated these voluntary schemes for over a decade. The schemes have been used by milk suppliers to address volatility in the dairy markets.
However, as a consequence of recent world events, the processor stated that there is unprecedented volatility in milk pricing, farm input costs and availability.
As previously reported by Agriland, the new Fixed Milk-Price Support Scheme will operate as follows:
- For all existing fixed milk-price volumes above 35% of the supplier’s total supply in 2021, Glanbia will increase the fixed milk price paid on this milk to a base of 40c/L (including VAT), plus constituents;
- On top of this 40c/L, for relevant volumes, milk suppliers will be paid the sustainability bonus of 0.5c/L in 2022 and all seasonality payments – including any unconditional seasonality bonuses and, as relevant to particular suppliers, the liquid milk premium and autumn calving bonus;
- In order to qualify for this 40c/L fixed milk price in 2022, suppliers will be required to commit the same FMPS volumes in 2023 and 2024 at a base milk price of 38c/L (VAT inclusive), plus constituents and relevant bonuses or payments.
“For example, a 750,000L supplier with 75% of their annual supply volume contracted under FMPS will have 40%, or 300,000L eligible for the milk price support scheme,” the processor said.
In this example, the value of milk-price support would be €27,000.
In order to qualify, the supplier will be required to contract the same volume (300,000L) at 38c/L (including VAT) in 2023 and 2024.