Individual milk processors have different models for rewarding or returning some of the additional cost of winter milk production to farmers.

Farmers who participate in winter milk schemes with local processors are a segment of the total milk pool, similar to liquid milk farmers, who continue to milk cows right through the winter.

Compared to the southern processors, annual milk supply in the northern counties is much flatter, but some bonus schemes also exist over winter months.

As you can see from Table 1, most of the southern processors have between 7% and 14% of their total manufacturing pool involved in a winter milk supply arrangement (not liquid milk).

How each processor manages the winter payment terms is up to each individual processor. Most of the winter schemes are capped in that no more farmers are allowed supply milk into the schemes.

Effectively the milk processors are saying they have enough for what they need over the winter months or that they can get milk elsewhere when required.

Individual schemes

Recently, Glanbia has revised how it structures and pays its farmers in the winter milk scheme. Its stated intention with the changes is to maintain quality milk that can be used for different products.

Glanbia has now moved the winter premium to four months (November to February inclusive) rather than five months.

A precondition of the Glanbia scheme is that you provide at least 20% of your annual supply over the four months in question and a minimum of 3% in a month. This means if you are supplying 500,000l then at least 100,000l in total must be supplied from November to February. The premium is 8.5c/l above base manufacturing price.

The Carbery (west Cork) winter milk scheme is spread over five months (October to February inclusive) and the winter premium varies from 3.2c/l to 7.26c/l on the winter supply.

Lakeland has a winter scheme where the target is to supply a percentage of your monthly May supply over the four months of November to February inclusive. Target is to supply 50% of your May supply for the month of November and 45% of your May supply each month for December, January and February. The bonus for doing this is 3c/l in November and 5c/l for December to February.

Dairygold operates a winter milk scheme confined to a small number of suppliers.The scheme pays a bonus of 5.6c/l to suppliers who achieve specific production and quality targets in the months from November to February inclusive.

Kerry has no winter bonus structure. It is clear to suppliers and will aim to reduce its cost structure by closing sites over winter weeks.

The Arrabawn liquid milk scheme covers off most of the Arrabawn winter requirement so as such it has no winter scheme. Arrabawn has an unconditional 2c/l early calving bonus for milk supplied in February.

Aurivo doesn’t have a specific winter milk scheme. Similar to Arrabawn, it has a “liquid” milk arrangement with Aurivo suppliers that suffices for milk produced over the winter months.

In Northern Ireland, the winter milk bonuses vary slightly from year to year. However, Kieran Mailey informs me that some are very consistent. Dale Farm and Glanbia Cheese usually bonus 2p/l each month for October, November and December. Lakeland pays 3p/l for November and December. LacPatrick last year paid 2p/l Oct to Dec. Aurivo also paid 2p/l for Oct and November and then 1p/l for December and January.

Strathroy pays 1 p/l over five months October to February inclusive.

So while the premiums look attractive there are of course extra costs to producing milk over the winter compared to spring milk and it is for this reason that the winter premium or bonuses exist.

The big two costs that differ to spring milk are feed costs and labour. Estimates suggest that extra feed costs for milking cows amount to 5c/l to 6c/l over the winter months so in effect any winter premium goes almost entirely into extra feed costs.