IFA National Dairy Committee Chairman Kevin Kiersey has welcomed Glanbia’s revised fixed price milk contract as a genuine attempt to address farmers’ legitimate concerns with their initial offer.
He said it was particularly important that the revised scheme would now allow the milk price to increase to reflect input cost inflation, and that it would be open to all suppliers, regardless of production pattern and test results.
“As we said last December, this is a positive move by Glanbia to address farmer concerns over price volatility. A stable milk price for three years will give farmers more confidence to invest in the future of their business, and I believe the Glanbia proposal will suit many of their suppliers,” Mr Kiersey said.
He added, however, that the IFA concern over possible cross-subsidisation of the contract price by the market-based price remained, as expressed last December when the first version of the scheme was launched.
“Glanbia must reassure farmers, whether they choose to partake in the scheme or not, that the price they will receive for their non-contracted milk will not suffer to prop up the contracted price. They must also be satisfied that justified price increases, if they drive milk prices above the contracted price, will be fully passed back,” Mr Kiersey concluded.