Tirlán has announced its milk price for July supplies, as well as an expanded support package for suppliers battling drought and fodder shortages.

Tirlán said that the support package will be worth a total of €15 million.

The processor has also simultaneously announced a new five-year "payment framework" for participants in its liquid milk and autumn calving schemes.

On June 18, Tirlán announced a three-month milk price commitment covering milk supplied during June, July and August.

However, the board has approved a "weather-related adjustment" of 1c/L to the milk price for all three of those months, including June.

As a result, the manufacturing milk price from Tirlán for July milk supplies is 39.08c/L, including the 1c/L Weather-Support Payment and the 0.5c/L Sustainability Action Payment.

The base price, Weather Support Payment and Sustainability Action Payment will be adjusted to reflect the actual constituents of milk supplied, Tirlán said.

The actual average price paid by Tirlán for July creamery milk, based on delivered constituents, will be 43.82c/L (including VAT).

The August payment run will also include the 1c/L Weather Support Payment on all milk volumes supplied in June.

Commenting on the current situation, Tirlán chairperson Ger O'Brien said that exceptionally low grass growth is having a significant impact on milk supply, with deliveries to Tirlán in August running 8% behind the same period last year.

"Our farmers are dealing with severely elevated milk production costs and will require an improvement in market returns in order to sustain milk production into the backend," O'Brien said.

Support measure

The Weather Support Payment will be worth €10 million of the total €15 million supports put on the table by Tirlán.

The other €5 million will fund the already announced drought support package, which provides a rebate to suppliers for feed and fertiliser.

The rebate has now been extended for a third time.

The qualifying period for the rebate has been extended to September 19.

The measure provides a rebate of €40/t on GAIN dairy feeds; €10/t on rolled cereals; and €3/t on straight feed.

O'Brien commented: "The board agreed that we need to support our suppliers, as far as possible, in coping with the extremely challenging conditions being experienced across our catchment area.

"We would encourage all milk suppliers to engage with our technical teams to help manage their herds over the coming weeks, maintain milk production and secure adequate fodder supplies for the winter," he added.

"Grass growth has effectively stalled on many farms, while average farm covers are at record low levels at a time when farmers would normally be building grass supplies for autumn grazing," the Tirlán chairperson said.

Apart from this drought support measure, Tirlán said it is also increasing its credit facilities for its agri-customers to accommodate higher on-farm expenditure; and provide technical advice to farmers through a series of webinars over the coming months on nutritional advice.

The first of those webinars will take place this Thursday (Augsut 20) at 2:00p.m.

The processor is also planning a series of "branch clinics" to assist farmers on cow nutrition and fodder budgets.

New payment framework

The Tirlán board has also approved a new five-year "payment framework" for participants in the liquid milk and autumn calving schemes, effective from October 1.

The processor said the new arrangement is designed to provide greater certainty and support for suppliers over the duration of the agreement, while reinforcing the long-term sustainability of liquid milk production.

A new framework will see an increase in the January seasonality payment from 7c/L to 9c/L, while the seasonality payments for December and February will remain at 5cpl.

The seasonality payments are available to all milk suppliers, provided milk quality criteria are met.

This package will also provide a 13c/L liquid milk premium on contracted liquid milk supplies; a 12c/L premium on contracted Autumn Calving Scheme supplies; and additional support measures designed to assist suppliers during periods of milk price volatility.

Commenting on the new arrangements, Ailish Byrne, chief agribusiness officer at Tirlán, said: "The increase in the unconditional January seasonality payment...represents a significant enhancement that will benefit a large number of suppliers.

"Combined with the liquid milk and [autumn calving] premiums, the package provides greater certainty and support for suppliers who undertake the important role of producing milk throughout the winter months," Byrne added.

"By providing a longer-term framework, we are giving suppliers the confidence to plan and invest in their businesses, while helping to ensure a secure supply of high-quality fresh milk for customers and consumers," she said.