Superlevy fines may sink milk producers
Hundreds face financial ruin as country closes in on quota limit
Published 01/02/2011 | 05:00
Hundreds of milk suppliers could be hit with massive superlevy fines as milk supply edges dangerously close to the national quota threshold.
All the major processors have reported a surge in milk deliveries this month and industry sources now fear that an early spring or tighter calving pattern through February and March could push the country over quota.
Although the size of the national fine would be small, farm leaders have warned that hundreds of milk producers could face financial ruin given the extent to which they have over-supplied.
Michael O'Neill, of Glanbia, admitted that between 400 and 500 of the company's suppliers had already delivered their full quota. He said more than 200 farmers had gone "seriously" over quota. It is understood that 30pc of Dairygold's suppliers were running over quota on a year-to-date basis.
Mr O'Neill said supplies to Glanbia had "ballooned" during the last three months, while a spokesman for Dairygold said deliveries for the first three weeks of the year were up 25pc.
"We have 500 manufacturing [milk] suppliers who always stopped supplying for two months but who didn't stop at all this year," Mr O'Neill said.
"And those that did dry off cows are racing back into production again."
Both Dairygold and Glanbia are well over quota and management at both dairies have written to suppliers this week cautioning that a milk superlevy is now a distinct possibility.