The minimum penalty on milk supplied to Glanbia above a new reference volume will be 30% of the actual milk price. However, this could well turn into a charge or new superlevy fine for the farmer if Glanbia is faced with milk disposal.
Speaking to the Irish Farmers Journal this week Glanbia director of strategy Seán Molloy said: “The 30% penalty could turn into an actual charge on additional supplies. The clear message to suppliers is that they should not plan to send in volumes above their allocations during the peak month.”
New supply rules announced this week limit peak growth over the next three years.
Glanbia management hopes the moves announced this week will be temporary
Limited processing capacity because of a hold-up in developing a new cheese plant means Glanbia has had to move to cap volumes, allowing only small volumes of annual growth.
The other significant development is Glanbia will only accept new entrants that are co-op shareholders and they will only be allowed milk about 105 cows – the Glanbia average. This will change the dynamics of some plans in large land holdings.
Glanbia management hopes the moves announced this week will be temporary, but cannot give a commitment that this peak management policy may well continue beyond 2024.
This week Kerry, Dairygold, Arrabawn and the west Cork co-ops all increased February milk price. The GDT auction dropped 3.8% on average this week after a huge hike of 15% in the previous result.