Glanbia Ireland will offer farmer suppliers with a certain amount of their milk supply in fixed milk supply schemes a support payment to partially offset growing input costs.
The processor said it was conscious that the significant farm input cost increases in an environment of widening inflation is an issue of particular concern to suppliers who have significant proportions of their milk contracted under fixed milk price schemes.
The intention of these schemes is offer protection from swings in market volatility over the period of the scheme and allowing suppliers to plan ahead with a guaranteed price.
But with inputs costs rising, there is concern that these increases in a supplier’s inputs could undermine the benefit from the fixed milk price scheme.
The board of Glanbia Ireland has said that it “recognises this challenge”, and has agreed that fixed milk price scheme participants – who have more than 35% of their 2021 supplies in a fixed price scheme – will have the option to receive a 5c/L interest-free input cost support payment on fixed volumes above this 35% threshold during 2022.
So, for example, a supplier with 50% of their milk supply contracted under a fixed milk price scheme will be paid an additional 5c/L on 15% of the contracted milk volume in 2022.
The 5c/L input support payments will be recovered from the supplier over a two-year period in 2023 and 2024. Participation in the support scheme is voluntary, Glanbia Ireland said.
Glanbia Ireland plants 100,000 trees
Glanbia Ireland and its suppliers have achieved their ‘Operation Biodiversity’ target of planting 100,000 native trees and hedgerow plants, one year ahead of schedule, the business said this week.
To promote its sustainability commitment and to mark the decision taken by Glanbia Co-op to take full ownership of Glanbia Ireland, 10,000 potted native trees are being provided free to farm family suppliers and customers through the network of CountryLife Garden Centres.
John Murphy, chairperson of Glanbia Ireland and Glanbia Co-op said: “Our farm family suppliers have demonstrated strong commitment to sustainability action by embracing the Operation Biodiversity initiative with great gusto.”