Kerry Group says it has reached the limit on milk volume supply terms as per the agreed milk contract with suppliers.
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Kerry Group advises suppliers it has exceeded the agreement on volumes in the milk contract.

The latest information missile to Kerry milk suppliers from Kerry Group tells milk suppliers that they have used up their quota increase allocated post 2015.

In a message in its newsletter, Kerry Group says “milk volume has surpassed the aggregate of the guaranteed volume”. It goes on to say it will discuss future milk volume management with milk suppliers and the co-op board.

The background to this move is that post-quota removal, Kerry Group allocated each supplier a 20% supply increase on quota as part of the milk contract as it had spare capacity to take more milk without extra spend on milk processing capacity.

Obviously goodwill between the co-op and Kerry Group is at a low level, so big investment decisions in processing capacity like this now look likely to be used in any future discussions on leading milk price or joint venture agreements.

In early October Kerry offered a fixed price offer for 2022 at 33.6c/l excluding VAT at base solids and this week that fixed offer has increased almost 2c/l to 35.5c/l base price.

In this week’s dairy segment, That’s Farming, speaks to Evan Walsh, a farmer from Offaly. He discusses split calving, calving heifers at 24-months, using 100% AI, zero-grazing, achieving 600-700kgs of milk solids and expansion plans.

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