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Glanbia Cheese has announced changes to its milk pricing structure to incentivise higher milk solids.
Along with paying an April milk price of 26p/l, the Magheralin-based processor is now paying a new Mozzarella cheese quality bonus from 1 April.
The bonus will reward Red Tractor assured suppliers with an additional 0.2p/l on milk solids greater than 4% butterfat, 3.2% protein and below 25 TBC and 200,000 SCC.
As well as getting suppliers to concentrate on producing milk with higher solids, essential in cheese production, it is understood that the new bonus is the first step towards aligning Glanbia Cheese’s milk pricing structure across its plants in NI and Britain.
The company pays a higher base price to suppliers in Britain. However, the base there is 4.2% butterfat and 3.4% protein, compared with its NI base of 3.8% to 3.84% butterfat and 3.15% to 3.19% protein.
When the average milk qualities of an NI supplier are applied to both pricing structures, there is generally no difference between Glanbia Cheese’s milk price in NI and Britain.
The company is also changing its volume bonus with effect from 1 April. Previously, a volume bonus was only paid to suppliers producing 1m litres or more annually. This has now changed with a 0.15p/l volume bonus payable to suppliers producing between 650,000 to 1m litres, and a 0.65p/l volume bonus to suppliers producing over 1m litres annually.
A back payment of 0.25p/l is also being issued to Glanbia Cheese suppliers on all milk produced during the period from April 2017 to March 2018, worth an additional £2,500 for a 1m litre supplier.
Penalty
Glanbia Cheese has also decided to penalise the small pool of suppliers who have yet to sign up to the Red Tractor Scheme. The cost of processing this milk, along with the lack of market outlets, is currently being absorbed by the company and, ultimately, affects the monthly milk price. From 1 September 2018, a 3p/l penalty will apply.
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