Ornua has intervened in funding € 3-4 million to help dairy farmers who are bound by long and unfavorable fixed milk price (FMP) contracts.

Under the new Volume Metric Flexible Program, Ornua has offered dairy processors a 10% increase in fixed volume contracts in 2022 and 2023.

This is because some processors recently announced additional payments for their existing FMP contracts. This will force some suppliers to push milk prices up to 20c / L above current variable prices to ease the sharp inflationary pressures on farm inputs.

Talk to Independent agriculture, John Jordan, CEO of Ornua, said:

“It is the duty of all to strengthen and support these people in the spirit of cooperation.

“As a co-operative, we have provided our members with a flexible program of volume metrics, so if we have a fixed volume contract for our products with our members, we will raise the price of 10pc for that volume in 2022. I propose. I plan to buy the same amount at the same price increase next year. “

Support is funded by Ornua. This is completely separate from the payment support recently brought in by individual dairy processors. We purchased products, cheeses, butters and powders and what we did modified the provision of flexibility regarding their contracts to all co-operatives. “

It is understood that discussions are underway between Ornua, who is responsible for about 32 pc of the country’s annual milk pool under a certain amount, and its processor members about their intention to accept the offer.

This is due to Ireland’s largest dairy exporter recording operating profit of € 153.7 million in 2021, up 1.3%.

To commemorate the 60th anniversary of its founding, Ornua reported last year’s “excellent trading performance”, with Group sales rising 6.9% to € 2.5 billion.

Sales of Kelly Gold have increased by 12%, with more than 11 million packets of butter and cheese sold worldwide each week. Overall 389,000 mt of Irish products purchased also reported significant revenues to Irish dairy farmers, adding € 78 million in Ornua Value Payments to member suppliers, up 13.5% year-on-year.

Asked about profit sharing in the dairy sector, Jordan said, given the continued impact of rapid inflation. Therefore, we are confident that we are paying a very good product price and paying additional revenue with Ornua Value Payment.

“Future milk production in Ireland, as well as climate change measures and sustainability, are certainly projected to slow growth.

“In the economics of the global dairy market, demand is fairly strong, but supply is weak, so in simplest economic terms it means prices will rise.

“There is no immediate increase in supply, which means that as long as demand is rising across China, prices may reach this level or soften a bit from here to the end of the year. “

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