Dale Farm has launched two new producer-focused schemes, aimed at encouraging members to supply more milk.
The first is a tweaking of its existing Milk Production Incentive (MPI) measure, which pays a bonus of 4p/L for all milk produced during the months of October, November and December, relative to the same period in 2015.
“The board has decided to extend the scope of MPI,” said Dale Farm group chief executive Nick Whelan.
“Our plan now is to pay a production bonus of 3p/L for nine months of the year. Milk produced during the months of April, May and June will be excluded.
Our aim is to provide a genuine incentive for dairy farmers committed to producing milk year-round.
He added: “The new scheme kicks-in at the beginning of the new financial year, which means that milk produced from the beginning of July 2018 onwards will be eligible.
“The bonus will be paid on incremental milk produced on a monthly basis, relative to the equivalent period in 2017.”
Whelan also confirmed that Dale Farm is to introduce a new entrants’ scheme with immediate effect.
“New entrants will receive a bonus of 3p/L on all milk produced for nine months of the year. Again, the months of April, May and June will be excluded.
“All milk produced during 2018 will be eligible for the bonus, which will operate on an incremental basis during 2019 and 2020.”
Whelan continued: "We have the capacity to process an extra 30 million to 40 million litres of milk annually.”
He also confirmed a very strong response from Dale Farm member suppliers to the co-op’s recent fixed-price contract supply offer. This guarantees a base price of 27p/L for all contracted volumes over a three-year period, beginning on January 1 next.
“The fixed price commitment reflects the strength of the signals that we are receiving from our customers,” he said.
“I can confirm that very significant volumes of milk will be tied-up within the new contract arrangements from the start of 2018. We accepted, in full, the applications made by all those members seeking to participate in the new measures."