Ninety dairy farmers in Limerick and Clare, who supply liquid milk to Kerry Group, are preparing to calve down and produce winter milk - but at sharply reduced volumes.
In March these farmers finished a six-year contract with Kerry, which included a liquid milk payment of up to 14c/l on top of Kerry manufacturing price.
The deal offered by Kerry to the suppliers for this winter totals 2m litres of liquid milk, less than half of previous volumes. The liquid milk payment is also halved, suppliers told the Irish Farmers Journal. The deal will shortly go to the National Milk Agency for ratification and will run from 1 November to 28 February 2018.
A spokesperson for Kerry said this week that going forward the Group would negotiate with potential purchasers of this liquid milk, on an annual basis, to secure an outlet for the biggest possible volume.
The six-year contract was put in place after Kerry sold its Dawn brands to Glanbia in January 2011. Glanbia is now selling liquid milk in Limerick and Clare, under the Dawn and Golden Vale brands, using milk from its own suppliers.
After exiting the business Kerry has sold the liquid milk produced by these farmers to other dairies including Glanbia, Arrabawn, Connacht Gold and Clona Dairies.
Kerry also used some for its own manufacturing use, it is undertood.
There were originally 125 liquid suppliers in this group, but some have now ceased winter calving and switched to supplying all manufacturing milk to Kerry.
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Farmer margin the weak link in liquid price
Full coverage: liquid milk
Ninety dairy farmers in Limerick and Clare, who supply liquid milk to Kerry Group, are preparing to calve down and produce winter milk - but at sharply reduced volumes.
In March these farmers finished a six-year contract with Kerry, which included a liquid milk payment of up to 14c/l on top of Kerry manufacturing price.
The deal offered by Kerry to the suppliers for this winter totals 2m litres of liquid milk, less than half of previous volumes. The liquid milk payment is also halved, suppliers told the Irish Farmers Journal. The deal will shortly go to the National Milk Agency for ratification and will run from 1 November to 28 February 2018.
A spokesperson for Kerry said this week that going forward the Group would negotiate with potential purchasers of this liquid milk, on an annual basis, to secure an outlet for the biggest possible volume.
The six-year contract was put in place after Kerry sold its Dawn brands to Glanbia in January 2011. Glanbia is now selling liquid milk in Limerick and Clare, under the Dawn and Golden Vale brands, using milk from its own suppliers.
After exiting the business Kerry has sold the liquid milk produced by these farmers to other dairies including Glanbia, Arrabawn, Connacht Gold and Clona Dairies.
Kerry also used some for its own manufacturing use, it is undertood.
There were originally 125 liquid suppliers in this group, but some have now ceased winter calving and switched to supplying all manufacturing milk to Kerry.
Read more
Farmer margin the weak link in liquid price
Full coverage: liquid milk
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