A farmer supplier of North Cork Creameries has said that only those farmers who are in dire straits will accept new fixed milk-price terms offered by the co-op.
The co-op confirmed to Agriland that it “has provided details of a revised fixed milk-price offer” and is “discussing these details individually with milk suppliers who are currently on these contracts”.
New terms
Under the new terms, Agriland understands, the milk suppliers are being offered a 10c/L top up on the current contract price per litre.
“I won’t take it,” the North Cork Creameries supplier said.
“Only the farmers whose backs are to the wall, and are going broke will take it. The other farmers are not taking it,[the uptake] is minimal,” he said.
The offer that is currently on the table for the co-op’s farmers, would see their contracted price increase from around 31c/L to 41c/L, the farmer said.
It is understood that this 41c/L (plus 2c/L supplementary) is available on up to 75% the volume of contracted milk.
The remaining 25% of contracted milk would be paid at 31c/L (plus 2c/L supplementary).
However, farmers who avail of this will have to commit to the same volume – 75% – to be contracted forward to 2023 at 42c/L.
It is understood that all milk already under contract for 2023 will be paid the original price, and does not fall under the new terms.
The farmer referred to the new contract terms as the “Ornua deal”, a reference to the recent announcement by Ornua that it had offered financial support to its member co-ops in a bid to help alleviate the financial burden on some farmers.
North Cork Creameries is one of eight Ornua member co-ops.
This financial support came in the form of: 10c/L on 10% of the fixed-product volume that it currently purchases from its member co-ops, back to those co-ops for 2022.
In 2020, Ornua purchased 400 million litres, in total, from its eight member co-ops.
But this offer was conditional on suppliers committing to additional fixed milk-price volumes in 2023 at 42c/L.
Ornua confirmed recently that two co-ops had availed of the offer, but would not identify them.
When asked if the recent revised fixed-price terms was as a result of Ornua’s support offer, the North Cork Creameries spokesperson said:
“North Cork Creamery continues to work directly and individually with suppliers on fixed milk price contracts to identify the various options they may have, and to support them as much as we possibly can, and we will continue to do so.
“We don’t comment on any commercial arrangements with onward customers.”