Huge demand for co-op fixed prices

The increase is relative to the previous contract offered in January 2019.

Commenting on the new scheme, Dale Farm Group Commercial Director, Stephen Cameron said: “We are pleased to see our latest fixed milk price contract option being well received and supported by Dale Farm producers throughout Northern Ireland.
“Fixed milk price schemes can help offer stability from volatile dairy markets and it is encouraging to see so many farmers considering their business needs and opting for this type of contract.”
Dale Farm announced its first fixed milk price contract option in January 2018, followed by a second the following year. Its third has proved the most popular to date.

When asked if the co-op will be committing to cover all the extra milk volumes applied for, a Dale Farm spokesperson said: “The nature of this type of contract means there is a finite amount of milk we can accept into the scheme in order for us to be able to guarantee a fixed price.

“To balance the milk offered to the amount available on the contract, all offers have been reduced on a pro rata basis.”

Courtesy of the new offer, farmers supplying milk to Dale Farm are being given the opportunity to sign up to a voluntary three-year Fixed Milk Price Contract to supply an agreed fixed amount of milk per month at a base price of 26ppl (April to September) and 29ppl (October to March). This price is for base quality milk of 3.85% butterfat and 3.18% protein.

Milk supplied on the contract will be eligible for quality payments for SCC, Bactocount, protein and butterfat as per the standard quality payments of Dale Farm milk quality payments.

This is the third fixed milk price contract supply offer from Dale Farm. The co-op’s Head of Farmer Services Neville Graham, commented on the impact made by the first two fixed price offerings at farm level.

He said:“Fixed milk price schemes were introduced by Dale Farm from January 2018 as a means to offset risk and help even cash flow in the event of volatile milk prices.

“Fixed milk price schemes, whilst not designed to beat the market, have played a role particularly in 2019 and 2020 as both Brexit and Covid-19 have led to market distortion which has impacted on producers’ milk price.”

According to Neville, Dale Farm’s fixed milk price schemes are linked directly to customers who have locked in volumes of product at agreed prices, then working back down the supply chain removing costs of production to arrive at the equivalent milk price which is then offered to the producers.

He added: “As a farmers’ co-operative, sentiment from producers to have more security for a proportion of their milk has been acted upon in negotiating such contracts and making fixed schemes a reality.”