Glanbia’s board has moved to create a stability fund that will help protect against “sudden changes in market dynamics”.
The fund will be built gradually under the direction of the board, a company spokesman said. agriland.
The money will go to the fund from the income generated by the organization. It is anticipated that these funds would then be distributed over a period to providers if there were a sudden change in the market.
The stability fund is separate from the €43m milk and grain price provision, which was announced last month and is to be paid to suppliers over the next 12 months.
A stability fund is a mechanism used by Glanbia Co-op and other organizations to help suppliers during periods of extreme market volatility or uncertainty.
A Glanbia spokesman said its stability fund will be created from April.
the spokesman said agriland While dairy market yields are currently at record highs, there are also significant challenges in the price and availability of key agricultural inputs such as feed, fertilizer and energy.
“Subject to market conditions, it is intended to gradually build a stability fund in the coming months,” the spokesperson said.
“Any funds accumulated in the stability fund would be paid out to providers at a later date to help protect against any sudden changes in market dynamics.”
In 2013, Glanbia created a €5 million milk price stability fund (MPSF) during the very strong dairy markets in the same year.
Farmers were subsequently paid when market yields fell.
“The balance of the MPSF, amounting to 2.6 million euros, was delivered to farmers in the June 2015 milk payment,” the spokesman said.
The company said it had no further comment at this stage on the stability fund until it has discussed it with its suppliers.