The decision by Glanbia to put in place a Fixed Milk Price Support Scheme to assist suppliers struggling in fixed contracts has been welcomed by the Irish Creamery Milk Suppliers Association (ICMSA).
However, the farm organisation has said it will seek clarity that buyers of Glanbia’s processed milk have shown similar flexibility with the processor – and that the price of the move won’t be made up by lowering base milk price payments.
Yesterday (Tuesday, March 29), Glanbia Ireland announced details of the new scheme, which aims to assist suppliers who entered large supplies of milk into fixed price schemes at a rate of payment considerably lower than recent monthly base prices, and who are therefore being disproportionally impacted by huge increases in input costs.
Pat McCormack, the president of the ICMSA, said: “There is growing and unprecedented pressure on dairy farmers who locked into these contracts in the last number of years as costs of production have skyrocketed in the last number of months.”
He noted that ICMSA members had been contacting the organisation “for weeks” in large numbers outlining the impending losses they will face in the coming year.
“It is vital that a solution to their price/cost squeeze is put in place,” McCormack argued.
An ICMSA delegation will be meeting with Glanbia soon to discuss the terms and conditions of the support scheme in greater detail.
“It is vital that farmers do not go to the wall because of fixed price contracts.
“Be very clear, there is a real danger that these farmers could exist the industry as they simply cannot make ends meet,” McCormack warned.
The farm organisation said it will ask Glanbia if its customers further up the supply chain have shown flexibility.
“It is a welcome development, but it is essential that the customers are paying the additional costs and not farmers through a lower base price,” the ICMSA president concluded.