The Arrabawn deal will see suppliers have the opportunity to sign-up at 29.c/l (at 3.60% fat and 3.30% protein), exclusive of VAT, across the eight month calendar from March to October this year as well as 2018 and 2019.
Any surplus arising from members not taking up on the offer will also become available to interested suppliers and offered to them in proportion to their 2016 volumes.
Announcing the contract, Arrabawn CEO Conor Ryan said that it will give suppliers price certainty across 10% of their milk for three years. “This is an opportunity for suppliers to hedge a portion of their supplies in what has the potential to be a volatile post Brexit period, with some turbulence expected in the short-term as arrangements bed down after Britain leaves the EU.
Dairygold launches second fixed milk price scheme
Meanwhile, the board of the north Cork-based operation Dairygold approved a scheme which offers a fixed price of 30.75c/l, set at reference milk constituents of 3.30% protein and 3.60% fat, including top-quality and approved-quality assurance bonuses and VAT.
Effectively for comparison purposes, it’s a Dairygold price of 29.17c excluding VAT at 5.4% or 28.67c excluding VAT and the quality parameters. The Glanbia fixed milk price margin scheme announced just before Christmas had a base price of 28.55c/l excluding VAT at 5.4% (30.1c/ incl VAT at 3.3% protein and 3.6% fat).
This is the second fixed milk price scheme offered by the Dairygold Society and, like the previous one, it is completely voluntary and open to all milk-supplying society members. The new scheme will run for a three-year period from 1 March 2017 to 30 November 2019 inclusive.
The Glanbia fixed price scheme started on 1 January 2017.
Interested Dairygold milk suppliers will be asked to apply before Wednesday 15 February, expressing their preference for 5% or 10% of their 2016 supply. Dairygold says that under the scheme a milk supplier delivering the average Dairygold milk constituents of 3.51% protein and 4.16% butterfat will receive a price of 34.05c/l.
Speaking about the scheme, Dairygold chair James Lynch stated: “Dairygold is pleased to offer this scheme which is totally voluntary but gives our members the opportunity to de-risk a portion of their milk supply for the next three years. I believe it is important for every member to consider the option from their own perspective to hedge against future market volatility.”
Unlike the Glanbia scheme, we understand the Dairygold offering has no track on market price, input costs or inflation.