Dairy chief urges caution on post-quota milk price
Fears for milk returns echoed by EU Commissioner Dacian Ciolos
Ireland's second largest co-op is heading for a massive super-levy bill for the next two years.
Dairygold is 3.5pc over quota this year and is likely to be closer to 10pc over next year, according to Dairygold CEO, Jim Woulfe.
Strong milk prices and the anticipated end to milk quotas in just over 12 months will drive production, but dairy bosses are warning farmers not to bank on the current high prices lasting for the rest of 2014.
"There's a real danger of farmers getting too comfortable at the current price of 39c/l," Mr Woulfe told a Teagasc seminar in the Horse and Jockey, Co Tipperary last week.
These fears were echoed in Bucharest, where EU Agriculture Commissioner admitted to being nervous that a flood of milk next year could undermine dairy markets.
"The market is good at the moment but we know from the experience of 2009 that it only takes a very small over-supply to have a huge negative impact on prices," Commissioner Ciolos told the Farming Independent.
However, he denied that he had any wish for the quota system to be extended for the dairy sector.
"I've no intention of returning to a quota system but we do need the means to react faster than we did after 2009. The establishment of the EU's milk observatory should help that but we may need other measures."