Glanbia Ireland (GI) has this evening (Tuesday, March 29) announced details of a new support scheme for its milk suppliers in fixed milk-price schemes.

The milk processor said it is "very conscious of the significant challenge that some suppliers are facing as a result of the volume of milk contracted under Fixed Milk Price Schemes [FMPS]".

These schemes have operated for over a decade and have "served suppliers in addressing volatility in dairy markets", according to a statement from the milk processor.

Commenting on the scheme, Sean Molloy, Glanbia Ireland’s chief agribusiness growth officer, said: "As a consequence of recent world events, there is unprecedented volatility in milk pricing, farm input costs and availability.

“In an effort to help address the challenges faced by farmers with larger volumes contracted under FMPS, the board of Glanbia Ireland have agreed a number of voluntary options to help support participants," Molloy added.

Details of the new Fixed Milk Price Support Scheme:

"So for example, a 750,000L supplier with 75% of their annual supply volume contracted under FMPS will have 40%, or 300,000L eligible for the milk price support scheme," the processor said.

In this example, the value of milk price support would be €27,000.

In order to qualify, the supplier will be required to contract the same volume (300,000L) at 38c/L (including VAT) in 2023 and 2024.

Based on the average milk constituents for 2021, the expected average milk price paid on volumes in FMPS above the 35% threshold would be 45.55c/L during 2022, according to Glanbia.

In addition to this, the supplier will receive other applicable payments, such the as the Farm Input Cost Support Scheme.

Farm Input Cost Support Scheme:

So for instance, a supplier with 40% of their milk supplies contracted under FMPS will receive the farm input cost support prepayment of 5c/L on 5% of the contracted volumes in 2022.