Co-ops put brakes on milk cheque handout
Processors withhold payments amid fears of superlevy penalties
Published 05/07/2011 | 05:00
Superlevy fears have forced some dairy processors to start withholding milk cheques from farmers that are already over quota.
The increase in milk supplies, compared with last year when Ireland had a narrow escape from a superlevy bill, continues across all regions, with some processors reporting milk supplies up by as much as 15pc compared with the same period last year.
As a result, Glanbia has issued letters warning farmers that fines of 20c/l will be imposed from the end of next month on any over-quota supplier that has supplied more than 350,000 litres since the start of the quota year.
The country's largest processor has never taken precautionary measures of this kind so early in the quota year, and is seen as an indication of how serious the superlevy situation is becoming.
This time last year, the country was 3pc under quota. However, almost every dairy processor is heading over quota at the moment, with Dairygold 9pc and Glanbia 7.6pc over for the first three months of this year.
Glanbia suppliers were also informed earlier this month that the board will review the situation on a monthly basis and take "appropriate" action to protect the co-op from a superlevy fine crisis.
Lakeland Co-op has gone one step further by not accepting supplies from dual suppliers that have already filled their quotas with the northern-based co-op. In addition, the processor started deducting a levy from recent entrants that are over quota.
Cork-based co-ops have decided to start making superlevy deductions as soon as suppliers reach 110pc of their allocated quota. Dairygold and Lisavaird are the exceptions to this, in that they will deduct the superlevy on account as soon as their suppliers breach their total quota.