Rocketing milk supplies trigger superlevy threat
Published 12/06/2013 | 05:00
A dramatic turnaround in national milk supplies has given rise to fears that Ireland could incur a superlevy fine for exceeding its national milk quota in 2013/2014.
Superb weather conditions and near record milk prices have ratcheted up milk supplies at all the co-ops.
Glanbia announced yesterday that it would pay producers a base price of 37c/l for May milk, up from 36c/l the previous month. Kerry announced a price of 38c/l last week.
The board of Town of Monaghan held its milk price of 37c/l for May at a meeting on Friday night. A raft of co-op board meetings are due later this week.
However, the prospect of bigger milk cheques is being tempered by a warning that some co-ops are on track to exceed quota this year.
Milk supplies to Glanbia last month were described as "very strong" for most of the month, with total milk collections up 2.4pc on the same month last year.
A spokesman for Glanbia Ingredients Ireland said it finished May under quota by 1.3pc but added that "we are rapidly catching up on quota." Supplies for the early days of June were described as very strong.
Dairygold was 3.4pc under quota at the end of May but with increasing weekly milk supplies, a spokesman said the shortfall was "being eroded quickly". Weekly milk supplies have been running 3pc higher per week since late May.
The co-op has removed its peak penalties on milk produced during May and June. It said that in light of the fodder crisis and associated cost increases, its February bonus payments would not be conditional on supplying 14pc or less of annual supply in May and June 2013 and 2014.
Arrabawn recorded a massive surge in milk in the past six weeks. April milk supplies were low, resulting in the co-op finishing the month 10pc under quota. However, milk supplies have flooded in during recent weeks and the co-op finished May just 2pc under quota.
Lakeland supplies are running 3pc higher week-on-week this year compared to 2012, and the co-op is estimated to be 2pc under quota. However, a spokesman for the co-op warned farmers that "all the signs are that we could be over quota this year."
Wexford Creameries finished May 1pc over quota, following strong supplies in April and May. May deliveries were 3.5pc higher than May 2012, while June supplies are running 3-4pc higher than June 2012.
However, Kerry is currently significantly under quota so far in 2013 and is likely to play a key role in shaping the national quota position.
At the end of May, the co-op was 7.25pc or 18 million litres under quota, according to a spokesman.
At the same time last year, the co-op was running a million litres under quota.
The spokesman added that total milk supplies during May this year had been 4.2pc lower than May 2012, reflecting poor grass growth and cold temperatures.
The ICMSA warned farmers not to ignore the threat of a superlevy. "It would be very foolish of all farmers to assume that there will not be a superlevy issue this year," warned ICMSA dairy chairman Pat McCormack. "The last thing farmers need is a superlevy bill in 2014."
He urged farmers to seek quota coverage for any extra milk supplied this year through the first phase of temporary leasing, which closes on Friday.
Irish IndependentFollow @Indobusiness