Lakeland Dairies will phase in a payment based on milk solids over the next two years in Northern Ireland following consultation with suppliers there.
Lakeland, the largest dairy co-operative in the north, said that the aim of the move is to support the “continued production” of high milk solids.
Following consultation and analysis in recent months, the board of the co-op agreed on a new payment model for Northern Irish farmers.
The aim of the payment model, according to Lakeland, is to reward higher milk solids, protect volume and quality bonuses, and reward farmers supplying out-of-season milk.
Between July 1, 2024 and January 1, 2026, the processor will move towards an A+B-C method of paying for milk supplied in Northern Ireland, where A is the price paid for protein, B is the price paid for fat, and C is the cost of processing the milk.
Lakeland said that the shift to this payment model will be “phased and consistent”.
Separate to the new method of calculating base price payment, Lakeland is also extending its out-of-season payment period from two months to four months for suppliers in Northern Ireland.
Suppliers will now receive a 3p/L out-of-season payment for the four months November to February inclusive, rather than just November and December as is the case currently.
The co-op will host specific clinics for suppliers over the course of May and June to inform them of the changes.
Commenting on the new payment regime, Lakeland chairperson Niall Matthews said: “The model for milk purchasing in Northern Ireland has been evolving over time. In recent times, changes have been made to solids payments, volume bonuses, out-of-season payments and quality payments.
“We are giving a long lead-in time for farmers to familiarise themselves with the changes and work towards making small tweaks to their herd in order to maximise payments,” Matthews added.
“We do not envisage that sweeping changes will have to be made to herds in Northern Ireland as many farmers have been on this journey for a number of years.”
“The aim of these changes is simple. We are committed to supporting our farmers in NI for the long-term,” Matthews said.
Keith Agnew, Lakeland’s vice-chairperson, commented: “We firmly believe that these changes will help deliver greater levels of financial sustainability for our farmers while also encouraging greater levels of efficiency inside the factory and farming gates.”