The announcement by Lakeland Dairies that it is to move all suppliers on to an A+B-C payment model by 1 January 2026 was among the main talking points for dairy farmers at last week’s Balmoral Show.

Representatives from Lakeland maintain that the reaction of suppliers was largely positive. The fact the co-op is retaining its volume payments and moving to four months of a 3p/l winter bonus is continued recognition of the importance all co-ops put on winter milk and those farmers who produce consistent volumes throughout the year.

However, it is also known there is a sizeable group of Lakeland suppliers with their notice in to leave and these farmers have been unhappy across a range of issues including how the co-op has paid for higher solids milk.

The fact they will receive an enhanced payout for butterfat and protein above the Lakeland base, starting from 1 July 2024, is a significant financial incentive, which might settle that particular group.

Given how production across the island of Ireland looks likely to be constrained by environmental rules into the future, no co-op wants to lose producers, especially those with high solids.

The same also applies to Dale Farm, which has gradually introduced higher increments for butterfat and protein in recent years, but is yet to commit to an A+B-C type model. While other processors at Balmoral seemed to be open to the change, the initial reaction from Dale Farm was that it won’t be in place any time soon. Whether that position can be sustained will depend on the views of members.

With Tirlán already paying using A+B-C and Lakeland to follow suit, the fact remains that for a high solids producer, there is a significant financial benefit to be had by finding a processor implementing the system.

Longer term, incentivising solids is about growing the overall value of the NI milk pool, but in the meantime, it is important not to lose sight of actual milk prices paid by each company. Switching to A+B-C does not suddenly mean a processor can pay out more than it can afford.