There are somewhere between 450m and 700m litres of milk tied up in fixed milk contracts, according to CEO of the Irish Co-operative Organisation Society (ICOS), TJ Flanagan.
Ireland's milk pool is over 8bn litres in total - if 700m is tied into contracts, this equates to almost 10%.
The Oireachtas Committee on Agriculture met on Wednesday 13 April to discuss the number of dairy farmers contracted into these fixed milk price schemes, which are, in some cases, up to 15c/l lower than the current variable milk price being offered by co-ops.
Despite the committee's constant pressure on ICOS representatives to state the exact number of farmers tied up in contracts, they could not give a definite answer.
We as an organisation in ICOS were unaware, up until very recently, that there were member co-ops allowing individual suppliers go beyond that point
Flanagan said that well under 1bn litres of the country's milk pool are in fixed milk contracts.
Committee chair Jackie Cahill said: "No one expected costs to escalate as they have in recent times and these farmers now find themselves in precarious positions, with fixed milk prices and costs spiralling out of control."
Dairy chair of ICOS, John O'Gorman, said that most farmers have less than 10% of their total milk supply tied into these contracts.
"The vast majority of farmers have only a small amount of their total milk supplies in a fixed milk price scheme.
"Some co-ops had caps where they only allowed a maximum of 10% take-up in each scheme of the individuals annual milk supply.
The integrity of the contract is very important in principle, and we do have to protect our reputation as a reputable trading partner
"We as an organisation in ICOS were unaware, up until very recently, that there were member co-ops allowing individual suppliers go beyond that point," he said.
O'Gorman added that allowing farmers to tie up more than 10% of their annual milk supply was a "very risky" undertaking.
However, he added that the fixed milk price scheme was produced by co-ops “in good faith” and has served the industry well up until recent “unprecedented events”.
"From our position, the integrity of the contract is very important in principle, and we do have to protect our reputation as a reputable trading partner," he said.
O’Gorman said that we need to look at the American model where farmers could lock in both their input costs as well as their output prices and therefore secure a margin.
“We have a very good example of this in the US, where they can lock in a fixed margin irrespective of whether milk price is at 50c/l or 20c/l,” he said.
He added that it was the farmers who came to the co-ops looking for an "income volatility tool" and that they were a voluntary contract.