Thursday 29 September 2016

Strong demand for EU milk scheme despite price rally

Declan O'Brien

Published 21/09/2016 | 02:30

Milk processors report a strong interest in the scheme
Milk processors report a strong interest in the scheme

Thousands of farmers have signed up for the EU Voluntary Milk Reduction Scheme despite dairies increasing milk prices for the second month in a row.

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Processors report strong interest in the scheme, with a fifth to a third of suppliers applying to join.

Accurate national figures were not available at time of going to press, as processors were still validating the numbers who had applied, and the volumes of milk involved.

The highest application rate was in Kerry Group, where 1,331 of the company's 3,400 milk suppliers applied to join the scheme - or almost 40pc. Farmers applied to put 20m litres into the scheme.

Glanbia confirmed that 13pc of suppliers have applied for the scheme, with the proposed volume reduction being 13m litres. This equates to 25pc of the October to December supply and 0.6pc of annual supply.

Lakeland Dairies estimated that 10-15pc of farmers signed up for the scheme. The co-op had no final figures on the volumes involved but expected it to be small.

Two hundred Arrabawn farmers, 20pc of suppliers, applied to join the scheme, while in Tipperary Co-op, 13pc of farmers applied.

The Tipperary Co-op suppliers applied to put 1 million litres into the scheme.

Eleven percent of Lisavaird's suppliers have put in for a total of 450,000 litres or 0.5pc of the co-op's total annual supply.

A quarter of Drinagh's suppliers put in for the scheme, while 20pc of Bandon's farmers applied.

Dairygold declined to give details of application levels.

A spokesman said co-op staff had not finished validating the data.

Meanwhile, a number of co-ops set their August milk price over the last few days.

Lisavaird confirmed that it was on 27.14c/l, while Tipperary Co-op is on 25c/l.

Arrabawn raised its price by 1.5c/l to a base of 25.17c/l and will pay a bonus of 0.5c/l. Dairygold moved to a base of 24.5c/l, plus a quality bonus of 0.5c/l.

Glanbia, Kerry and Lakeland Dairies all moved to 25c/l, with the Glanbia price including a 2c/l support payment from Glanbia Co-op.

While welcoming the lift in milk returns, ICMSA was critical of the 2c/l being paid by Glanbia Co-op in Glanbia's price.

"Based on the GDT and the Ornua Index GII should be paying 25c/l out of its own resources and not using Co-op funds - effectively farmers' money - to subsidise farmers' milk price," said ICMSA's dairy chairman, Gerald Quain.

Co-ops estimate 20pc-33pc of suppliers have applied

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