A number of Glanbia suppliers in the midlands have been handed a 10c/l bonus on a proportion of their milk pool after Birr-based feed supplier J Grennan and Sons released dairy farmers from their fixed-milk-price contracts.
Grennans launched its fixed milk price package in October 2017 after Glanbia controversially stipulated that farmers had to purchase 100% of their dairy rations from the company to qualify for its fixed-milk price scheme. This requirement was later abandoned by Glanbia.
Under the Grennan scheme, the Glanbia suppliers received a fixed price of 31.5c/l for an agreed (up to 20%) portion of their milk for five years, but the milk continued to be supplied to and processed by Glanbia.
While the feed company chief executive John Grennan declined to comment on the exact number of farmers in the scheme, the volume of contracted milk is believed to be small.
The release of the dairy farmers from the scheme, which was due to run until this October-November, is worth close to 10c/l for all contracted volumes as Glanbia’s base price is currently around 41.5c/l (VAT inclusive).
John Grennan said the aim of their fixed-milk price scheme was not to generate income for the firm but to “highlight” and “disrupt” what he described as Glanbia’s “anti-competitive tactics” regarding farmers’ ration purchases.
“We have given the customers involved the option to finish with their contracts this month, February. Needless to say, they are delighted to be able to avail of the significantly higher [milk] prices,” Grennan said.