Back in the late spring of 2024, Dale Farm announced it was introducing a Milk Production Realignment (MPR) scheme to encourage members to supply more milk to the co-op from August through to January.

The announcement was on the back of the £70m investment in cheese production at Dunmanbridge, which added 20,000t of cheese capacity. With that processing infrastructure in place, Dale Farm would have capacity to process all of its own milk at peak in May.

However, in a letter to suppliers, the co-op pointed out that May supplies to Dale Farm are normally 40% ahead of the trough month, which is typically September. The MPR scheme was an attempt to flatten that curve and ensure facilities are run as efficiently as possible.

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The three-year MPR scheme started in August 2024 and pays 4p/l for additional litres produced over and above a reference volume for individual suppliers. That reference volume for each month is based on the average for that month across 2021, 2022 and 2023.

For example, a farmer supplying 68,000 litres in August 2021, 70,000 litres in 2022 and 72,000 litres in 2023 has a base reference volume for August of 70,000 litres – any additional litres over this reference produced in August 2024, 2025 and 2026, will receive 4p/l over base price.

Rising

At the time the scheme was envisaged milk price was around 35p and meal price approximately £300/t. However, with rising milk prices and static feed prices, producers quickly responded and milk supplies towards the end of 2024 were very strong and potentially well ahead of what processors thought might happen. As a result, Dale Farm has probably paid out more in its MPR scheme than initially thought.

Shown in Table 1 is the average payout to Dale Farm suppliers made in the scheme to date. This payout has been factored into the milk league analysis on the opposite page, so in September 2025 a total of 0.60p/l has been added to Dale Farm prices paid. If current production trends continue to the end of the year, it is reasonable to suggest this figure could be around 0.85p/l in December 2025.

It is also important to point out that the payouts made by Dale Farm suggest the co-op has seen volume growth during the six months from August to January, that is ahead of the NI average.

If we take NI average production for August 2021 to 2023, output in the same month in 2024 was up 3.8%, although by December 2024, it was actually up 10%. Those figures would suggest the Dale Farm MPR figure should have been between 0.15 and 0.36p/l in the first year.

Final figures for production in August 2025 have not yet been published by DAERA, but it is reasonable to estimate it will be up by about 12.6% over same month in 2021 to 2023. That would point to a MPR figure of around 0.45p/l.

Given that the actual figure recorded by Dale Farm was 0.61p/l, it highlights the extent to which farmers will respond to positive market signals when offered up by processors.