Ireland: how Glanbia manages the rate of growth in peak milk supplies

In Ireland the biggest dairy cooperative Glanbia has announced a mechanism to manage the rate of growth in peak milk supplies in April, May and June from 2022. The base will be calculated on each supplier’s highest total volume over the peak supply months of 2018, 2019 or 2020. There is no restriction on growth in milk supply volumes outside of this three peak months. Under the peak supply management policy farms with an annual milk supply of less than 400000 litres may grow peak volumes by ten percent over their base. Farms with annual milk supply of between 400000 and 550000 litres in the base period may grow their volumes over the peak supply months by five percent per year over their base. Farms with annual milk supply of over 550000 litres may grow their volumes over the peak supply months by 2.5 percent per year over their base. Growth for recent entrants (less than three years) will be facilitated up to the 550000 litres threshold, after which point they align to a compound growth rate of 2.5 percent on peak months. For expanding suppliers, all milk volumes supplied above the allocated peak volume over the Peak Supply Months will incur a milk price deduction of 30 percent of the prevailing milk price each month, or the cost associated with the disposal of the milk, whichever is higher. A Voluntary Reduction Scheme will allow suppliers to voluntarily commit to reducing peak milk supplies by a minimum of 10% based on their 2020 supply volumes for a three year term achieve a payment of 10 eurocents per litre for the peak volumes not supplied.

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