Dairygold has moved to significantly improve returns to its suppliers who are on fixed milk price (FMP) schemes.

In a letter to suppliers, which has been seen by the Irish Farmers Journal, Dairygold confirmed that a minimum quoted milk price of 38c/l will be paid for all milk supplied to the co-op in 2022.

This is an increase of between 5.75c/l and 6.25c/l on milk supplied under its various FMP schemes.

“The Dairygold board, at their meeting of July 19, determined that the minimum quoted milk price for all milk supplied to the society in 2022 would be 38.0c/l at 3.30% protein and 3.60% butterfat, inclusive of quality and sustainability payments, plus VAT, an increase of 6.25c/l on FMP 5 and 5.75c/l on FMP 6,” the Dairygold letter outlined.

“This is the equivalent of 43.1c/l at the society’s 2021 average protein and butterfat results. This ensures that all milk supplied to the society in 2022 will generate a margin and is not loss-making,” the letter added.

'Extensive process'

The milk price top-up for the year to date will be paid in the July milk cheque, with the additional monies for the remainder of the year being included in Dairygold’s monthly milk payments.

Dairygold management said the top-up payments on the FMP contracts were secured following “an extensive process” of negotiations, which sought to secure “more favourable terms from customers, including Ornua”.

“This value is a combination of an enhanced offer from Ornua and better market returns from secondary ingredients specifically produced from FMP milk,” Dairygold stated.

“These payments, in recognition of the truly exceptional circumstances, do not prejudice either the society’s or your [the supplier’s] commitments under the FMP 5 and FMP 6 schemes, or any other contracts in force,” the Dairygold letter maintained.

Dairygold also insisted that the top-up on milk supplied under its FMP schemes would not impact the price paid for non-FMP milk.

“The society is committed to paying the maximum variable milk price, for the benefit of all milk suppliers, with the current quoted June 2022 milk price being 55.5c/l [including VAT],” the letter stated.