Glanbia Ingredients Ireland (GII) has launched a new Fixed Milk Price Scheme, offering milk suppliers the option to protect a portion of their milk supply from the extremes of market price volatility.
Phase 10 is a one-year Fixed Milk Price Scheme offering a milk price of 31 cent per litre (cpl) including VAT for the full year of 2018.
Glanbia chairman Henry Corbally said that GII is acknowledged as a global leader in the development of market price volatility tools, having launched a scheme every year since 2011. Twenty per cent of GII’s milk pool is now in Fixed Milk Price Schemes, with over 60% of suppliers participating.
“These schemes are totally voluntary, but I am delighted that over 2,000 of our farmers now avail of the option to reduce milk price risk on a portion of their milk supply,” Henry Corbally said.
Sean Molloy, Director of Strategy and Supply Development with GII, said that suppliers in the currently active schemes have on average 25% of their supply volumes in Fixed Price arrangements (based on 2016 supply volumes).
“We will continue to explore innovative ways to help our milk suppliers and customers cope with market price volatility,” he said.
“Phase 10 offers milk suppliers the option to fix the price for a portion of their 2018 milk supply as part of risk management for their business.”
Phase 10 is a Fixed Milk Price Scheme running for one year, from January to December 2018. The Scheme will pay a base milk price of 31.00 cpl including VAT. The Scheme price of 31.00 cpl is based on standard constituents of 3.6% butterfat and 3.3% protein. Actual constituents greater or less than standard constituents are paid for at the Scheme price. There are no adjustments for market price movements or farm input cost movements. Any support payment made by Glanbia Co-operative Society to its members will be paid on top of the fixed milk price. Participants in Fixed Milk Price Scheme (Phase 9) will be given priority access to Phase 10 for 100% of their Phase 9 allocation volume. Application forms for Phase 10 will issue to all GII milk suppliers in the coming weeks, with a closing date for applications of 30 June 2017.