Dairygold board looking at fixed milk price scheme
Dairygold is currently considering introducing a fixed milk price scheme for its suppliers.
At Dairygold’s annual area meetings currently running (last three weeks) across its traditional six electoral areas (Mitchelstown, Mallow, Limerick, Tipperary. East Cork, Mid Cork) the co-op’s CEO Jim Woulfe has told attending Members that one item the Board is going to look at in the New Year is fixed price milking.
Woulfe told members that management is currently working on options for the Board’s consideration in the New Year.
Also addressing volatility in the dairy sector recently was the Minister for Agriculture who said that there are things that farmers can do to improve the situation and he has used the tax system to improve things.
“We have changed three-year income averaging to five-year income averaging so that people can average out their profits over five years rather than three years.
“As a volatility management measure, we actively encourage dairy co-ops to look at medium-term fixed price models.
“Glanbia and Kerry are already doing so and Dairygold is on the verge of putting a product together for farmers,” he said.
According to the Minister, who was speaking in front of the Oireachtas Agriculture Committee many farmers have tied themselves to two or three years of fixed prices for milk at 32 or 33c/L base price.
“They now look like they are in a pretty good position versus everybody else.When they fixed their milk price many other farmers claimed they were mad because at the time the base price was 38c/L.
Minister Coveney said price volatility is the reason we have the dairy and beef forums.
“We want to look at models whereby we can help to hedge against or ensure against the downside of price volatility.
“Nobody wants not to benefit from the upside of prices either. We want to take the highs and lows to ensure more consistent pricing,” he said.