Quota superlevy fine of €10m looming large
Latest exchange prices of up to 50c/l make 'no commercial sense'
Published 28/03/2012 | 06:00
Up to 50c/l has been paid for quota in the latest round of the milk quota exchange as the country heads towards its first superlevy fine in five years.
Prices in the exchange ranged from 8c/l to 50c/l, showing only a slight easing from the last round in December when quota hit a high of 56c/l.
The new figures were released against a backdrop of growing anxiety that Ireland is on the brink of a massive superlevy fine for the current quota year.
The country's quota position deteriorated considerably last month, moving from 0.3pc under quota on January 31 to 0.07pc under quota on February 29.
Since then, milk supplies to the co-ops were reported to be very strong, driven by a combination of mild weather, good grass growth and an increase in cow numbers.
Industry experts believe this last flush of milk could be the catalyst for the first superlevy fine since the 2007/2008 quota year.
Last month, ICOS expert George Kearns predicted that Ireland would finish 35m litres over quota based on supplies to the end of January, which would equate to a superlevy bill of €10m. If the over-quota co-ops pulled back supplies by 10pc, that would reduce the over-quota position to 18m litres, or a fine of €5.15m.
However, with February and March milk supplies in all co-ops running considerably up on last year, it looks like a superlevy bill in the order of €10m is looming.