Glanbia advance payment scheme opens to grain grower members
Grain grower members of Glanbia Co-op are to receive letters in the coming days outlining details of the Glanbia Advance Payment (GAP) Scheme for grain.
The scheme provides interest-free cash flow support to member suppliers in periods when market prices are weak.
Over the next five years, up to €5m of interest free cashflow support is available to grain supplier members from Glanbia Co-op.
Participation in this voluntary scheme will allow members draw down cash flow support from the scheme when the market price for grain falls below specific levels or “price triggers”, which Glanbia has said are set annually by the Board of the Society.
The price trigger for the 2016 GAP Scheme was a December 2016 MATIF (Euronext exchange) price available before July 31, 2016 of less than €180/t for wheat.
As this price trigger has been reached, an advance payment is available for oilseed rape (OSR), beans, green and dried grain supplied from the 2016 harvest.
For participating grain suppliers who are members of the Society, the voluntary GAP Scheme (for 2016 Grain) will operate as follows:
- The Advance Payment on 2016 grain, oilseed rape (OSR) and bean deliveries is set at €20/t on a maximum volume equal to the member’s 2015 supply of harvest products (cereal grains, OSR and beans);
- The trigger for a grain reimbursement to the GAP Scheme is a MATIF (Euronext exchange) price of €205/t of wheat occurring after July 31, 2016. Once the price trigger is reached, reimbursements of the Advance must occur within 12 months;
- If not repaid earlier by virtue of market price movements, all monies advanced in 2016 to participating members will be recovered between January and December 2020.
While participation in the 2016 GAP Scheme (for 2016 Grain) is voluntary by members, it is subject to Glanbia credit assessment.
Henry Corbally, Chairman of Glanbia Co-operative Society, said that one of the core principles of Glanbia Co-op is to support its active members and the GAP Scheme was developed by Glanbia to help its member suppliers cope with income volatility.
“The aim of the GAP Scheme is to deliver interest-free cashflow support to members who supply milk or grain to Glanbia.”