Eoin Lowry reports on a new five-year fixed milk price scheme launched by Glanbia this week. The decision on whether or not to lock in milk price should not be based on a desire to try and beat the market.

Instead, the discussion should be focused on the need to improve business resilience.

While milk price volatility is hitting the headlines in recent years, the reality is that the five-year average milk price varies by little more than 1-2c/l.

Of course, this ignores the fact the peak-to-trough milk price within a five-year period has on occasions varied by as much as 14c/l.

It is these sharp shocks that provide the biggest challenges, especially to those businesses with high levels of debt.

Certainly, farmers operating on a high proportion of rented land with hired labour and who have recently invested heavily in the business should be taking a close look at the fixed milk price options – but solely as a means of minimising risk in the business.

Meanwhile, the decision by Glanbia to include a ration rebate for dairy farmers into the mix is an interesting development and one that will certainly not go unnoticed by local merchants or indeed their beef and sheep farmer clients.

The apparent bias towards giving farmers feeding higher levels of meals priority access appears to go against the low-cost grass-based message.