Farm Ireland

Saturday 20 January 2018

Anxious wait in final bid to avoid superlevy

Milk supplied during March will decide if quota limit is exceeded

Declan O'Brien and Caitriona Murphy

Thousands of dairy farmers are facing a nail-biting three weeks as the country battles to avoid a superlevy fine.

With the situation on a knife-edge, the volume of milk supplied during March will now settle whether or not Ireland exceeds its milk quota limit.

Most dairy bosses believe the country will slip under the quota threshold, but others are not so sure.

Both sides agree that the difference between Ireland facing a superlevy fine or not could come down to one or two days of supply, or between 13m and 26m litres.

Optimal grazing conditions over the last week are also likely to have given supplies another boost.

Several senior co-op sources claimed that the game was already up and the only question at this stage was the extent to which we would exceed our national quota.

At the end of last month, Glanbia, Dairygold, Wexford Creamery, Donegal Creamery and the West Cork co-ops were all over quota.

Kerry Group, Lakeland Dairies, Town of Monaghan and Connacht Gold were under quota, while Tipperary and Arrabawn were on quota.

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A spokesman for Dairygold confirmed that at the end of last month, the co-op was 4.5pc over quota, while milk intake for the month was 11.5pc up on the same period the previous year.

However, the co-op is already understood to be withholding milk cheques on farmers who are well over quota. Given the current quota situation, it is likely to be close to 50m litres over quota at the end of march.

Milk supplies to Glanbia and Premier have eased slightly over the past month but they are still running 4pc and 3pc over quota respectively. This puts the company more than 45m litres over quota.

Accurate figures are still not available for Donegal Creameries but it could finish the year at 9pc (3.5m litres) over quota, based on a 10pc increase in March 2010 supplies.

Wexford is running 3.5pc (3.4m litres) over, while Bandon will be over quota by around 4pc (3.9-4m litres) at the end of year. Meanwhile, Barryroe is 4pc, or more than 12.6m litres, over quota.

Kerry was 45m litres under quota at the end of January. However, 10m litres have been clawed back through February and a 20pc lift in supplies is forecast for March. The processor expects to end up around 25m litres under quota.

Lakeland Dairies was 5pc under at the end of last month. A spokesman said that the final position will once again depend on March supplies but should be around 3pc (10-12m litres) under quota. Supplies to Town of Monaghan were up around 16pc in February but in order to exceed quota, it would need a 50pc surge in March supplies. The co-op expects to be 1m litres under quota. Supplies to Connacht Gold are running ahead of last year but the co-op expects to be 6pc (15m litres) under quota.

Tipperary Co-op and Arrabawn were both on quota at the end of last month and supplies through this month will now be critical for the processors.

Arrabawn is confident it can stay under quota, but Tipperary maintains that any serious lift in supplies will tip the co-op into an over-quota situation.

While the official Department of Agriculture figures for last month's milk supplies will not be available for another week, the accepted view is that the country will still be around 1pc under.

Those of an optimistic mindset argue that there is no way that such a shortfall in production can be overturned in just four weeks.

They also claim that the ace in the hole from a supply perspective is the 0.25pc of 1pc that has been allocated for new entrants into dairying over the last two years. This equuates to 18m litres which will be availbel to the Department to help ease superlevy pressure.

However, those who believe the quota has already been blown point to the figures.

Glanbia, Dairygold, Wexford, Donegal and the West Cork co-ops have a cumulative over-quota total of more than 120m litres.

Given that the under-quota total is around 55m litres, they claim that a superlevy is unavoidable.

"I can't see how we're going to get out of a superlevy," one co-op source admitted.

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