Glanbia has agreed a new five-year deal for liquid milk producers. It will involve a buyout scheme for producers who want to exit liquid milk production. There is also an option for producers to increase output by up to 23%.

The central plank of the scheme is similar to the current deal – a 7.4c/l bonus for producers for each of the six months from October to March.

The working bands, which see prices cushioned from extreme volatility in either direction, are retained.

There is an option for farmers to opt for a fixed price scheme. This will commence in January 2020, with the basic price being 35c/l including VAT.

Farmers who cease liquid milk production will have their quotas cancelled in exchange for a once-off exit payment and a transition payment.

Levies

Remaining suppliers will be levied to help pay this compensation, in recognition of the exit package helping to protect their liquid milk quota volumes. At meetings across the Glanbia region, Fresh Milk Producers members have been generally positive towards the package.

Glanbia’s Sean Molloy said: “While the liquid milk market in Ireland faces significant challenges, Glanbia Ireland is committed to leveraging the considerable strength of our brand and our suppliers’ commitment to supply the highest quality milk.”