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Sunday 22 January 2017

Dairy farmers poised to beat superlevy bill

But quota experts warn of even greater pressure in coming year

Published 05/04/2011 | 05:00

Dairy farmers look set to escape a multi-million euro superlevy bill after they applied their collective brakes to milk supplies in the dying days of the 2010/2011 quota year.

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The latest estimate from ICOS shows that Ireland finished less than 0.5pc or 15-20 million litres under quota for the year ending March 31.

While confirmation of the final quota position will not be available for some days, the ICOS figures would suggest that the country came within one day's supply of incurring a superlevy bill.

A co-ordinated slowdown in milk supplies to the country's two biggest processors, Glanbia and Dairygold, was one of the biggest factors in avoiding the superlevy.

However, warning flags have already been raised about the possibility of a superlevy bill in the 2011/2012 quota year and beyond.

ICOS quota expert George Kearns warned that all the factors that would point to a superlevy next year are already in place.

"Cow numbers are already running ahead of national quota levels and the buoyant milk price will be a major factor," he pointed out, adding that milk supplies have already started the year strongly in early April.

Glanbia has confirmed that it expects the final figures to show that it finished the 2010/2011 supply year at between 3.5pc and 4pc over quota.

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This would equate to an over-quota supply of around 50-55m litres, based on its 1.4bn litre pool of manufacturing milk and is an improvement on earlier predictions that it would finish the year 5pc over quota.

Dairygold officials have said that while the final calculation is not yet complete, it is likely that the co-op's final position will be 4.5pc or some 40m litres over quota for the year.

The co-op confirmed that considerable volumes of milk were withheld at farm level in an effort to reduce the over-quota supply.

Suppliers to Centenary Thurles exceeded their collective quota by some 4.5m litres, equating to 4.4pc over quota for the year.

The west Cork collective of Bandon, Barryroe, Drinagh and Lisavaird all exceeded their respective quotas. Supplies to Bandon surpassed quota by around 3.95 million litres, an overshoot of 4.3-4.4pc, while Barrryroe exceed quota by 4-4.5pc or 2.6-2.9m litres.

Drinagh finished at around 800,000 litres over quota, which was a 0.5pc overshoot, while Lisavaird confirmed it finished at 2.5pc over quota with an excess of two million litres.

Donegal Creameries finished at 1-1.2m litres over quota, according to early calculations. Tipperary co-op officials have estimated it finished the year 1pc over quota or approximately 1.136m litres over, before considerations such as flexi-milk are taken into account.

However, the over-supply was balanced by lower supplies to Kerry and other processors. Kerry came in as expected at 35m litres or 3.5pc under quota, despite a week-on-week increase in milk supplies during March.

Connacht Gold finished the year at approximately 5pc or around 9m litres under quota for the year. A spokesman for the co-op said supplies had been running at 5pc under and this was expected to be the final figure for the 2010/2011 supply year.

Final milk supply figures for Lakeland will not be confirmed until later this month as the co-op shares a considerable number of dual suppliers with Glanbia. Nonetheless, a spokesman for the co-op said Lakeland's final tally would be around 2pc, or 8m litres under quota.

Arrabawn's total for the year is understood to be approximately 0.5pc or 1.5m litres under quota. Town of Monaghan also finished as expected, falling short of its quota by about one million litres or 1pc.

ICMSA president Jackie Cahill has urged Minister for Agriculture Simon Coveney to seek a relaxation of the butterfat rules.

"If, by the skin of our teeth, we can avoid a large quota liability this year then, most definitely, we will experience even more difficulties matching our supply to our quota over the next four years," he warned.

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