Glanbia Ireland has told northern milk suppliers it plans to move to solids-based pricing by 2024.
The butterfat base level was 3.8-3.84%. However, under the plans it will now rise to 3.85%, going up to 3.90% by 2024. Every 0.01% above base will be paid at 0.021p/L, rising to 0.03p/L by 2024.
The protein base level was 3.15-3.19%. It will now increase to 3.20%, going up to 3.25% by 2024. Every 0.01% above base will be paid at 0.037p/L, rising to 0.054p/L by 2024.
Another change is that payment will now also be adjusted for total bacteria count, with anything above 50,000 penalised between 0.15p/L and 10p/L and anything below 25,000 given a bonus of between 0.25p/L and 0.35p/L.
As before adjustments will also be made based on somatic cell count, however, with slightly different bands. Deductions of between 0.2p/L and 6p/L will be made for SCC over 300,000, while cell counts of under 200,000 will be awarded bonuses of up to 0.4p/L.
A further 0.2p/L ‘Premium Quality Bonus’ will also be paid for milk attaining both a TBC of less than 11,000 and an SCC of less than 150,000.
Open discussion is needed
Ulster Farmers’ Union (UFU) deputy president David Brown said: “The news that Glanbia Ireland is planning to move towards constituent milk pricing is a significant breakthrough in addressing how milk is priced in Northern Ireland, as well as moving towards having a more accurate milk price that reflects the quantity and value of the dairy products being produced.
“Early pricing forecasts indicated that the NI milk pool would benefit significantly from this new form of pricing.
“For constituent milk pricing to work in NI, there needs to be an open discussion with all parties regarding the impact it will have on farm businesses.
The move by Glanbia Ireland comes at a crucial time for our dairy sector. It could boost the competitiveness of our sector as we utilise new trade opportunities and face new challenges in this post Brexit era.
“We will continue to engage with all stakeholders to consider what constituent pricing could mean for the NI milk pool,” added the UFU deputy president.