Farm Ireland
Independent.ie

Friday 18 August 2017

Milk supply surge means superlevy fine unavoidable

Declan O'Brien

Declan O'Brien

A surge in milk supplies over the past month has killed off any lingering hopes of the country avoiding a superlevy fine.

While IFA urged all over-quota dairy farmers and co-ops to work closely in the coming days to avoid the cost of a "wasteful" superlevy, there was no sign of a drop in the deliveries.

Farm organisations have expressed concern for a small percentage of dairy farmers who face crippling fines as a result of massive oversupply.

With just three days to go to the end of the 2010/11 quota year this Thursday, frantic preparations were being made by those co-ops which are over quota to reduce supplies. However, processors which are under quota are seeking to maximise deliveries for this quota year.

"There is a view out there that however bad this year was on quota, next year will be even tighter and every one of my suppliers will want their bulk tank emptied [on] Thursday. They are carrying no milk into the new quota year," said one source.

In contrast, a spokesman for Dairygold said the co-op was calling on all suppliers who are over quota to withhold deliveries for three days if possible.

Higher

Dairygold was 4.5pc over quota at the end of February but this figure is likely to have increased in the past month given that milk supplies for the first 20 days of March were 17pc higher than for the same period last year.


Glanbia's Michael O'Neill confirmed that supplies to the company were running 5pc ahead of quota on a week-to-week basis.

He said the company would facilitate suppliers who opted to store milk for the final few days of the quota year -- although he argued the capacity to do so was limited -- but he warned that the quality of deliveries could not be compromised.

Close to 2,700 of Glanbia's 4,400 suppliers are over quota, while 50-60pc of Dairygold's are in a similar position.

Exact figures are not available for the other co-ops but it is thought that similar percentages are over quota.

Should Ireland exceed its milk quota, then every over-quota supplier to an over-quota processor will be liable for a superlevy fine of 28.6c/l.

Those who exceed their quota by less than 15pc, and whose quota is short of 350,000 litres, should get away with little or no fine as they will get 90pc of the flexi-milk allocation.

However, in the case of a small number of farmers, the degree of oversupply is such that the superlevy fines could threaten the viability of their businesses.

Indo Farming