Glanbia reveals details of new 3-year Seasonality Scheme…and farmer bonuses

The board of Glanbia Ingredients Ireland (GII) has today approved the terms of a new three-year Seasonality Scheme, which is set to get underway in 2018.

For 2018, a fixed Early Lactation Bonus of 4.25c/L (including VAT) will be paid on all qualifying litres supplied during the last two weeks of January as well as for the month of February.

A Late Lactation Bonus will also be paid on all qualifying volumes supplied during the month of November each year, Glanbia confirmed.

The rate of the Late Lactation Bonus is set to be determined by the total qualifying volume, up to a maximum late lactation bonus pool payout of €0.5m.

For the current year, the Seasonality Scheme is expected to operate on the same basis as 2016, with a €2.2m fund allocated across the months of February, October and November.

The rate of payment per litre will be determined by the total qualifying volume in each of the three months, according to Glanbia.

Milk supply for the first full calendar year after milk quota abolition was reviewed by the board, Glanbia Chairman, Henry Corbally, said.

The board wished to encourage best practice, which for spring calving systems is to calve cows compactly at the start of the grazing season, he added.

“The move to a fixed Early Calving Bonus will provide farmers with certainty as they plan their forthcoming breeding season,” Corbally said.

Details of the Scheme

The new Seasonality Scheme is expected to be subject to annual review.

It is set to operate on the following basis from 2018:

  • Bonus payments, which are available to all GII milk suppliers in the Republic of Ireland, will be based on standard constituents.
  • The Early Lactation Bonus will be paid on all qualifying litres of creamery milk supplied during the last two weeks of January and the month of February.
  • The Late Lactation Bonus will be paid on all qualifying volumes of creamery milk supplied in November.
  • To qualify for the Early Lactation Bonus, suppliers must supply a minimum of 3% of their annual supply in the Glanbia accounting month of February.
  • To qualify for the Late Lactation Bonus, suppliers must supply a minimum of 3% of their annual supply in the Glanbia accounting month of November.
  • In order to qualify for both the Early Lactation Bonus and the Late Lactation Bonus, suppliers must supply no more than 15% of their annual supply in the Glanbia accounting month of June.
  • Milk lactose levels must be a minimum of 4.35% in order to qualify for the Early Lactation Bonus and Late Lactation Bonus.
  • Based on the previous year’s milk supply pattern (3% February, less than 15% peak), qualifying suppliers will be paid the Early Lactation Bonus with their February milk payment (paid in March).
  • Based on the previous year’s milk supply pattern (3% November, less than 15% peak), qualifying suppliers will be paid the Late Lactation Bonus with their January milk payment (paid in February).

In January each year a review of qualifying suppliers will be completed, Glanbia confirmed.

Following this, any newly-qualifying suppliers will be identified and they will receive a retrospective payment, it added.

Payments made to suppliers who did not meet the previous year’s qualifying criteria (maximum 15% in June and the minimum 3% February/November requirement) are expected to be recovered over the three-month period between April and June.

The Early Lactation Bonus and Late Lactation Bonus payments do not apply to suppliers with liquid and/or winter milk contract volumes, Glanbia added.