OMSCo announces winter bonus
OMSCo (Organic Milk Suppliers Cooperative) in the UK has announced a production bonus of 5ppl, effective from 1 September 2016 to the end of February 2017, which will be paid on all extra litres produced over and above the same period last year.
The aim of this bonus is to boost supply, needed as a result of continued export demand, which now accounts for 20% of OMSCo’s revenue and is forecast to increase to almost 30% this year.
This is the second consecutive year that OMSCo has initiated a production bonus, with 3ppl being offered from September 2015 to February 2016.
“The 2015 bonus resulted in a 12% increase in production, with 90% of members producing more milk than the previous year. The increase to 5ppl for this year reflects the increased cost of winter feed and the continued strengthening of organic export markets in particular. The incentive is paid on top of normal seasonality, and thus for many members will mean a milk price for incremental litres in the mid 40p range.” says Richard Hampton, OMSCo managing director.
“We have a strategy to diversify our portfolio, to ensure we can improve our balancing, provide the service and flexibility our UK customers expect, capitalise on premium opportunities in specialist markets and remove volatility for members. Export demand continues to be strong, and we are unable to meet demand in certain specialist markets where we have designed products to meet the needs of those customers. It’s great we can offer these additional rewards to our members and give them confidence in the future of organic dairying.”
Graham Vallis, an OMSCo board member, explains how over the last few years’ members have worked with the management team to ensure they are producing organic milk to the requirements of OMSCo’s global markets.
“The announcement of an increased production incentive is very welcome. It builds confidence and sends members a strong signal that the work we’ve done to create and enter new markets is paying off,” he says.
“As a result, members now have a stable environment in which to manage and drive their businesses. Even with the consideration of higher feed costs this winter, the 2016/7 winter bonus is on top of a stable milk price and gives members great confidence in the future of the organic dairy business.”
