Interest building in Glanbia contracts
Dairy farmers are beginning to sign up to the three-year forward milk price contracts offered by Glanbia ahead of the end of this month's deadline.
The plc is now confident of getting at least 6pc of its total milk supply locked in at 28c/l, according to Glanbia's Food Ingredients CEO, Jim Bergin.
With around a third of the national milk pool, this equates to more than 100m litres of milk.
"Our advisers are still working through the issues with suppliers on the ground, but we've had a positive reaction," said Mr Bergin. "Farmers appreciate this as an innovative way to deal with the inevitable volatility they will face in the future."
The offer consists of a fixed price of 28c/l, excluding VAT and seasonal or quality bonuses for three years from the start of this year.
There are several conditions suppliers must satisfy before they qualify for a contract. Applicants must commit a minimum 15pc of their total quota to the contract. The supplier must have passed all milk quality tests last year and not have supplied more than 16pc of their total milk supply during June.
In addition, suppliers must commit to supplying over a minimum of 10 months.
The deadline for acceptance of the contracts was shoved out to January 31 on account of a delayed Glanbia council meeting during the recent cold snap.