Dairy processor Glanbia Ireland has sent the details of a new five-year Liquid Milk Supply Agreement (LMSA) to liquid milk suppliers.
The LMSA, which was developed following consultation with Fresh Milk Producers (FMP), provides milk suppliers with a five-year contract that gives certainty of pricing.
For those who want to grow, the LMSA gives a guarantee of volume growth of 23%. There is also an opportunity for suppliers to exit liquid milk and transition to spring milk.
Liquid Milk Supply Agreement
“Whilst the liquid milk market in Ireland faces signification challenges, particularly with the growth in private label sales, Glanbia Ireland is committed to leveraging the considerable strength of our brand and our suppliers’ commitment to supply the highest quality milk,” Sean Molloy, chief agribusiness growth officer with Glanbia Ireland, said.
“To maintain our brands’ highest quality standards, we require milk suppliers fully committed to all year round milk production, with a dedicated proportion of autumn calving cows.
“We also appreciate that some farms would benefit from the switch to a complete spring calving system. Other farms require higher winter milk volumes in order to justify their commitment to year-round milk production. The new LMSA has options to suit both categories.”
Glanbia Ireland has but a restructuring model in place for those who wish to exit liquid milk production, where they will make a once off exit payment and a transition payment to assist the supplier to convert to a creamery production system.
To help finance the exit package, there is a restructuring levy for 3 years payable by all suppliers that remain in liquid production.
GI has committed to pay up to two-thirds of the restructuring costs with the balance paid by those remaining in liquid milk production.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.