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Lakeland Dairies to Implement Milk-Solid-Based Payment System in Northern Ireland

Source: The DairyNews
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Lakeland Dairies, the largest dairy cooperative in Northern Ireland, has announced plans to transition to a milk-solid-based payment system over the next two years following extensive consultations with local suppliers. The new payment model, designed to enhance the production of high milk solids, will be phased in between July 1, 2024, and January 1, 2026.
Lakeland Dairies to Implement Milk-Solid-Based Payment System in Northern Ireland
The cooperative aims to incentivize higher milk solids while maintaining volume and quality bonuses, and offering additional rewards for farmers supplying milk outside the traditional season. The revised payment formula, known as the A+B-C method, will calculate payments based on protein (A), fat (B), and deduct the cost of processing (C).

In addition to changing the base price calculation, Lakeland is extending its out-of-season payment period from two months to four, covering November through February, to further support its suppliers during less productive months. This adjustment increases the out-of-season payment to 3p/L for the extended period, compared to the previous arrangement covering only November and December.

Lakeland will host informational clinics in May and June to help suppliers understand and adapt to these changes. Niall Matthews, Chairperson of Lakeland, emphasized the gradual nature of this transition, noting that it allows farmers ample time to adjust their operations to optimize their earnings under the new model.

“These changes are part of a broader evolution in our milk purchasing strategy in Northern Ireland, reflecting our ongoing commitment to support our farmers and enhance operational efficiency both in the factory and on the farm,” Matthews stated.

Keith Agnew, Vice-Chairperson of Lakeland, also expressed confidence that these adjustments would bolster financial sustainability and operational efficiency for the cooperative's farmers, aligning with long-term strategic goals.