The voluntary scheme will pay a fixed base milk price of 31 cents (US$0.36) per liter (including VAT) at base constituents of 3.6% butterfat and 3.3% protein plus a feed adjustor valued at between 2 to 3 cents per liter (cpl) for those participating in the dairy feed element of the Glanbia Loyalty Scheme.
The feed adjustor amount varies depending on the volume of milk committed to the scheme and the level of feed usage.
Dairy feed component
Participants in the scheme can also take advantage of an optional dairy feed component, with a €30 ($35) per tonne loyalty payment on concentrate dairy feeds from Glanbia Ireland’s GAIN Animal Nutrition range.
Glanbia Ireland milk suppliers that participate in the feed option will have priority to the milk pool available in the loyalty scheme.
Glanbia chairman, Henry Corbally said the scheme provides milk suppliers with a guaranteed milk price for a period of five years, extending well beyond what is currently offered in any other jurisdiction.
However, the base milk price is fixed for the duration of the scheme - there will be no mechanism to adjust (up or down) for farm input cost movements, or if there are upward movements in the market price.
“I’m sure this is a scheme that will be welcomed by many farmers during a period of significant political and economic uncertainty,” he said.
Priority for those opting for both scheme components
Sean Molloy, director of strategy and supply development with Glanbia Ireland, said the Glanbia Loyalty Scheme offers customers traceability.
“The establishment of this cohort of farmers allows Glanbia Ireland to promote the ‘closed loop’ procurement concept in terms of product claims and marketing initiatives,” Molloy said.
“A ‘closed loop’ offers customers an exceptionally high level of assurance around the traceability and high quality of our dairy products, with all milk produced from grass and feeds sourced from our own Glanbia Ireland feed mills.”
The scheme will begin on January 1, 2018 and run for a five-year period to December 31, 2022.
It is open to all Glanbia Ireland suppliers in the Republic of Ireland with a milk supply agreement. Suppliers can elect to participate in the milk price element only, however, Glanbia said milk volumes will first be allocated to applicants subscribing to both components.