Glanbia’s decision to address peak milk supply had become an inevitability. Since quotas ended, its milk pool has expanded to a staggering degree.

The €343m worth of extra processing capacity can no longer cope with peak milk supply, which is up by two-thirds since 2014. Glanbia’s intake in a single week matches the annual intake of some of the smaller co-ops. Unfettered expansion was never likely to continue endlessly.

The main criticism of the move is the limited lead-in time for farmers to adjust their plans. Farmers have bought cows, taken extra land and built more milking/housing capacity – all investment for rapid expansion that now can only happen at 2.5% to 5% a year.

While only dairy farmers milk cows, many others milk dairy farmers, and will be affected

Feed merchants, AI companies and all those who service dairy farmers will also be readjusting plans. While only dairy farmers milk cows, many others milk dairy farmers, and will be affected. None more than banks, who have lorried money out to dairy farmers since 2014.

While Glanbia would love to divert milk deliveries to the shoulders of the production season, the shoulders farmers will be worried about are the last days of March and June.

Some hold that they were promised in 2013 by Glanbia that expansion for them would never be curtailed

Having an empty tank going into April will be a priority, as will filling that tank to the brim on 30 June. This kind of carry-on hasn’t been seen since the bad old days of quota.

Wexford suppliers may be wistfully recalling the days when they had 200m litres of capacity, twice their milk pool. Some hold that they were promised in 2013 by Glanbia that expansion for them would never be curtailed. But Glanbia bought that processing capacity knowing supplies would explode when quotas ended, and what used to be a neighbour’s relief valve at peak was quickly absorbed.

Innovative elements

There are innovative elements included. The Department of Agriculture’s farm retirement scheme was a casualty of the 2008 economic meltdown. While a range of governments have ignored calls for a successor, Glanbia is now offering a dairy cessation scheme.

The €15,000 a year for five years may attract farmers who have no identified successor. Glanbia suppliers don’t have to stop farming, just stop producing milk.

Their commitment to accept new entrants from within Glanbia Co-op’s existing shareholding is less restrictive than might first appear

One farmer asked me: “Could I get paid to stop supplying Glanbia, and supply another co-op?” The answer to that, unsurprisingly, is no. Younger suppliers may grumble at the circa €400 annual levy to pay for this, but those who soldiered through the quota years building Glanbia deserve something.

Their commitment to accept new entrants from within Glanbia Co-op’s existing shareholding is less restrictive than might first appear. Thousands of dry shareholders are farmers.

Existing suppliers are restricted to 2.5% and 5% growth. It may seem meagre, but for 30 years such expansion was an impossible dream for farmers and co-ops alike.