Farm Ireland

Friday 23 March 2018

Glanbia offers 29c/l until '19

Rabobank's Kevin Bellamy
Rabobank's Kevin Bellamy

Glanbia hopes that its seventh fixed price scheme will be another sell-out, similar to its last offering, which was over-subscribed.

Priority access will be given to manufacturing milk suppliers that applied to the sixth scheme in December 2015, with an additional allocation for new entrants in 2016.

Glanbia Ingredients Ireland (GII) has contracted over 1.1bn litres of milk since its first scheme some years ago, with the volumes being offered growing each year.

The base price on offer for the 33 month contract from this April is 29c/l, including VAT at 3.6pc butterfat and 3.3pc protein. The milk volume allocated to each participant will automatically double after 15 months.

In a vote of confidence for milk prices next year, the deal will pay out any top-ups from the co-op on top of this price from July 2017. However, until then, the 29c/l includes all member support payments.

Rabobank dairy analyst Kevin Bellemy said that while the Chinese had increased Kiwi dairy imports, it would be a "good way" into 2016 before milk price recovers. "European prices have been challenging but they haven't been enough to make people slowdown production," he said.

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