Tirlán will give farmers who are signed up to fixed milk-price schemes the opportunity to “cap” their volumes at 35% in 2023 and 2024.
The Kilkenny-headquartered co-operative said the cap will only apply to volumes under the fixed milk-price scheme (17) and the fixed milk-price support scheme.
Farmers will be able to “adjust” their volume of milk under both schemes at a total combined maximum of 35% of their 2021 annual milk volume.
However, volumes contracted under scheme 18 are “excluded from the adjustment”.
In a statement, Tirlán said:
“This adjustment will result in a reduction in contracted volumes in fixed milk-price schemes for suppliers with larger volumes contracted.
“The number of suppliers and volume of milk contracted under fixed milk-price schemes has fallen significantly in 2023.”
The co-op said its board had “taken the decision to adjust the schemes to provide further support to our milk suppliers”.
The move comes against the backdrop of a round of price cuts by milk processors including Tirlán.
Earlier this week the chair of Tirlán, John Murphy, said that “dairy market prices fell significantly from their record highs in the fourth quarter of 2022, with strong global milk supply volumes and subdued consumer demand due to inflationary pressures”.
The co-op has confirmed it will pay a total of 56.08c/L, including VAT for January creamery milk supplies at 3.6% butterfat and 3.3% protein.
According to Tirlán it will now begin to contact farmers whose volumes are above the combined 35% threshold to offer them the option to adjust these volumes.
Farmers will have until March 15, to accept the cap offer.
“The adjustment will be backdated to January 2023 and reflected in the March milk payment paid in April.
“Suppliers still have the option to partake in the fixed milk-price support scheme up until March 15, 2023,” the co-op said in a statement.
Tirlán has outlined that volumes above the combined maximum threshold of 35% will be cancelled.
It will start with volumes in the support scheme first, followed by those in scheme 17 – those volumes will be paid at the Tirlán monthly milk price.
According to the Irish Farmers’ Association the cap “will provide some assistance to suppliers with high volumes of fixed milk”.