IRELAND’S LARGEST milk processor has made a revised offer to its suppliers to create a “futures” market in milk supply.
Glanbia offered its 4,500 suppliers a chance to sell 15 per cent of their milk output for the fixed price of 28 cent per litre for a three-year period last December. The offer was limited to manufacturing milk – milk for making butter, cheese and other products but not liquid milk for consumption.
The move was welcomed by farm organisations, but there was a low uptake as milk prices were rising at the time.
Glanbia has now come forward with a revised offer at the same price, but this time the offer is index linked taking into account production cost rises. “This is the minimum price payable for the period and will be increased if necessary, to reflect any increase in relevant farm input costs relative to the base year [2010],” the company said in a statement.
It added the offer had been put forward again after negotiations with suppliers. “As a result we are now in a position to launch this revised scheme which seeks to address suppliers’ concerns in relation to margin erosion, as a result of input cost inflation,” said Glanbia’s chief executive Jim Bergin.