Warning of ‘excess unplanned milk’ at Dairygold
But such suppliers will have their 2012 supply base taken as their reference supply volume, by default, for future years.
“Any milk they might supply above their 2012 reference level will not have been pre-planned for. Accordingly, from 2015, such milk would be marginal, and a supplier can expect to be paid a lower price for their ‘excess unplanned milk’ to reflect the market return that can be achieved for such milk at that time,” a co-op spokesperson said.
“Suppliers have nothing to fear, even though the agreement may appear legalistic in its terminology, there is no entrapment in completing it, so I would encourage everyone to sign the agreement and complete their forecast as requested.”
The milk supply agreement and forecasting are seen as “absolutely required” so that Dairygold can have clarity on projected milk supply to justify corresponding investment in processing capacity, thereby avoiding waste in having overcapacity or lost opportunity through an under-investment.
Dairygold says 30% of milk suppliers have signed the milk supply agreement, and a one-to-one programme of supplier meetings has begun, with the co-op asking all milk suppliers to engage with their milk advisory team for comprehensive support in relation to suppliers’ post-quota plans, the milk supply agreement. or forecasting.
Suppliers are asked to call 1890 200840 to arrange a meeting.
nKevin Kiersey, the IFA national dairy committee chairman, welcomed the response by Dairygold to some of the main issues of concerns for shareholders and suppliers, including the 2c per litre penalty on suppliers who do not sign the milk supply agreement by Mar 31 — which the co-op has now dropped from its plans.
“We had clearly told Dairygold before Christmas that the penalty was provocative and unfair to their suppliers and we had urged them to reconsider it. I think Dairygold deserve credit for listening to us and to their suppliers, and for adopting a much more positive approach which is fairer to farmers,” Mr Kiersey said.
He urged all Dairygold suppliers to engage actively between now and the end of March in the one-to-one sessions aimed at helping farmers with the production forecasting process.
“This is also the opportunity for farmers to gain a detailed understanding of the new milk supply agreement, which is largely legally rooted in the rules of the Society.”
