Glanbia Ireland is to offer 42c/L to milk suppliers in 2022 as part of a Fixed Milk Price Scheme.
Agriland understands that the scheme will be open to applications until Friday, April 15, 2022 and will run for a duration of two years and 10 months, up to the end of 2024.
The fixed milk price for 2022 will be 42c/L (including VAT), reducing to 40c/L (including VAT) for 2023 and 2024.
The processor also plans to pay seasonal and sustainability bonuses on top of the fixed milk price. The fixed milk price will be adjusted for actual constituents.
Feed Price Adjuster
In light of the rising cost of inputs, it’s understood Glanbia will also introduce a feed price adjuster measure.
This would mean that for every increase of €50/t in feed prices, milk price paid under the new Fixed Milk Price Scheme would be increased by 0.5c/L, for 2022 and 2023.
There would be no upper limit on the increases, but accordingly, suppliers will not be penalised should feed prices fall.
Milk suppliers
The criteria for the scheme includes a requirement a minimum of 10,000L of milk and priority will be given to applications who are existing Fixed Milk Price Scheme suppliers.
10% of available milk volumes is expected to be allocated to new entrants to the scheme.
Glanbia Ireland
Earlier today (Friday April 1) Glanbia Co-operative Society Ltd., confirmed the completion of the transaction to acquire full ownership of Glanbia Ireland DAC, which will include a Milk and Grain Price Provision of €43 million.
The completion of the transaction follows the approval of the proposed transaction by Glanbia co-op shareholders at a Special General Meeting (SGM) on December 17, 2021.
The company previously operated as a strategic joint venture, 60% owned by Glanbia Co-op and 40% owned by Glanbia plc.
As part of the transaction terms, it was agreed that Glanbia Ireland would not be required to pay the dividend payable to its shareholders in 2022 in respect of the 2021 financial year and up to the closing of the transaction.
In order to fulfill its commitment to its members to pay the ‘best possible milk and grain price‘, the board of Glanbia Co-op has agreed that Glanbia Ireland will create a Milk and Grain Price Provision of €43 million, which will be paid to suppliers over the next 12 months as the business transitions to a more flexible profit model.
This could mean approximately €5,500 extra over the next 12 months for the average Glanbia milk supplier.