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The concept of paying more money for milk that meets a certain criteria is nothing new for those in the dairy sector.
For decades, farmers have been paid more for supplying milk with higher solids content, lower cell count and lower bacterial counts.
Sustainability bonuses are a new dimension in the sense that they reward dairy farmers for undertaking actions that improve the environment.
The purpose of the schemes is to reduce the carbon footprint of dairy and specifically scope three emissions for processors, the bulk of which occur on farms.
Kerry Agribusiness
The Kerry Agribusiness sustainability programme called Evolve, differs from the other co-ops in the sense that it is based on direct financial incentives for doing individual actions. The programme was launched in spring 2022 and is based on five key areas: water quality, soil health, biodiversity and grassland management, animal health and welfare, and farmer wellbeing.
There is a total of 23 actions for 2024 and farmers get paid based on what actions they take part in. Some of the actions require the purchase of inputs from Kerry Agribusiness. For example, there is a rebate of €40/t on protected urea when it is purchased from Kerry Agribusiness.
If protected urea is not used on the farm, the farmer is locked out of other soil health-related actions such as the rebate on muriate of potash purchases or the payment of €100/farm for undertaking a nutrient management plan.
Farmers are also paid for attending events with €150 on offer for attending a workshop or on-farm event on clover or multispecies.
Tirlán/Centenary Thurles
The Tirlán and the Centenary Thurles sustainability scheme both offer monthly milk price top-ups of 0.5c/l for participating farmers.
Tirlán has 20 optional actions and farmers must comply with seven in order to qualify for the scheme, while Centenary has 17 optional actions and farmers choose seven.
Some of the actions are conditional on doing business with the co-op. For example, protected urea purchases, low protein feeds, clover seeds and multispecies seeds must be purchased through the co-op.
However, other options are non-conditional and don’t require any purchases with the co-op such as reducing cell count, improving EBI, milk recording and doing a nutrient management plan, etc.
For 2024, Tirlán is assigning two actions to buying protected urea, so if farmers select that option they only need to carry out five other options in order to qualify for the payment.
Centenary Thurles requires 0.5t of protected urea per 100,000l of milk supplied, while Tirlán requires 1.5t per 100,000l supplied, which equates to approximately 85kg N/ha of 46% protected urea for a typical farm stocked at 2.5 dairy cows/ha.
Carbery
Administered through the four west Cork co-ops, the Carbery sustainability scheme rewards participating farmers with 1c/l milk price bonus.
There are four options for 2024; improving EBI, undertaking an ASSAP water quality assessment, milk recording four times per year or buying protected urea.
On protected urea, farmers must buy 2.2t protected urea per 100,000l of milk supplied in order to get the full bonus which worked out at €150/t discount in 2023.
On EBI, herds must either be in the top 50% for EBI, have an EBI gain per year in the top 50% (€24.77 increase in EBI in 2023) or genotype 25% of the herd.
Farmers must comply with three of the four actions in order to get the full payment but those that complete two out of the three measures in 2023 received partial payment of 0.668c/l.
Dairygold
The Dairygold Grassroots sustainability scheme rewards farmers with 0.75c/l equivalent milk price bonus for agreeing to undertake six sustainability actions.
These actions include the purchase of protected urea, undertaking a water quality visit, taking part in herd health screening, undertaking soil sampling and farmer training.
There is conditionality attached to the scheme in the sense that protected urea and soil sampling service must be purchased through Dairygold and herd health screening must be through Munster Bovine in order to get the rebates.
On protected urea, there is a €46/t rebate available for every 1t of 46% N protected urea purchased.
Aurivo
Aurivo is the latest co-op to come out with a sustainability scheme. Titled Future Milk, the scheme rewards farmers with 0.5c/l excluding VAT for undertaking three actions out of six options.
The six options include completing four milk recordings per year
Participation in the Bord Bia sustainable dairy assurance scheme is a mandatory additional measure.
The six options include completing four milk recordings per year, use 1t of protected urea per 100,000l of milk supplied, have an SCC below 150,000 or if higher for it to reduce by 5% per year, attend a water quality training event, use dairy bulls with a minimum of €230 EBI and beef bulls with a minimum DBI of €100 and genotype dairy heifer calves.
Aurivo has opted not to include any conditionality on purchases through their network of farm stores in their sustainability programme. Farmers that buy protected urea from other sources are required to just keep receipts.
Arrabawn
The Arrabawn sustainability scheme gives participating farmers a bonus of 0.5c/l including VAT for agreeing to undertake all three measures within the scheme.
The actions are using protected urea, agreeing to improve the herd EBI and milk recording.
On protected urea, Arrabawn suppliers must purchase 4t of protected urea for every 100,000 litres of milk supplied. For a typical supplier stocked at 2.5 dairy cows/ha this equates to 230kg N/ha equivalent of 46% protected urea which must be purchased through the co-op.
Furthermore, as part of the same measure, all fertilisers must include a protected N source.
This means that traditional products like 18:6:12, 27:2.5:10 and 10:10:20 which have CAN-based nitrogen cannot be used on Arrabawn farms that want to claim the full sustainability bonus.
On EBI, any herd within the top 50% for EBI in the Arrabawn catchment will qualify as will any gain in EBI that is in the top 50% of annual gain within the catchment.
Herds that fail to meet this criteria can genotype 25% of all dairy female stock to qualify. The third option is to milk record four times per year.
The payments for each measure are broken down by measure, with the protected urea and milk recording measures securing 0.2c/l, while the herd improvement measures secures 0.1c/l. Farmers can choose two out of the three options if they wish, but will then get a smaller bonus.
Lakeland
The Lakeland sustainability incentive payment was launched in 2024 and pays farmers a 0.5c/l bonus based on agreeing to five out of 12 measures.
The measures include improving herd genetics, milk recording, planting trees and hedgerows, etc.
A minimum purchase of 0.5t of protected urea per 100,000l of milk supplied is included as an option and there is no onus on the farmer to purchase this fertiliser from Lakeland.
Farmer uptake in these schemes is high with some co-ops signing up over 80% of suppliers.
Rather than being a bonus, the schemes are effectively part of the base milk price. At 0.5c/l, a 100-cow farmer would be down €2,500/year if they don’t take part.
What is quite apparent is that some of the co-ops are using the schemes to shore up their agribusiness interests
Let’s be clear, there is no differentiation in milk between farmers in the scheme and those outside so any additional market returns are based on the carbon footprint of the entire co-op milk pool falling.
Whether these market returns are real or not, we just don’t know, but it’s unlikely to be much, if anything just yet.
Like with all of these types of schemes, they are often just one of the hoops for the co-op to jump through in order to do business with a large multinational buyer.
What is quite apparent is that some of the co-ops are using the schemes to shore up their agribusiness interests.
What difference to greenhouse gas emissions if the protected urea is bought in the co-op yard or the private merchant’s yard? The co-op yard isn’t always the most competitive on price.
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