Farm Ireland

Tuesday 24 October 2017

Co-ops buy time as race for quota continues apace

Darragh McCullough

Darragh McCullough

The scramble for quota continues as co-ops procrastinate over how they will allocate processing rights when quotas end in 2015.

In the past week, hundreds of farmers have enquired about 180,000l of quota that has come to the market with 16.5ac of land in north Kerry.

Eddie McQuinn, who is handling the sale, expects the package to make more than €200,000, which will result in the quota costing the purchaser at least 40c/l.

"It's packaged to bring out the chequebooks with the minimum land and maximum quota," said Mr McQuinn, who claims his phone hasn't stopped ringing since he first advertised the sale in a local paper last week.

"The proceeds from a lot of Plc shares are being sunk into land and quota down here," said Mr McQuinn, who claims to have had one of the best six months ever in his business for land sales.

The ongoing demand for quota comes against a backdrop of predictions by Glanbia that dairy markets have already peaked. At the announcement of its half-year results last week, the company forecasts a modest weakening in dairy prices after this year.

The ICMSA's dairy chairman, Pat McCormack, said that the the co-ops needed to send out clearer signals in order to dampen down an overheated quota market.

"The lack of any real clarity from milk purchasers, with the exception of Kerry, is giving rise to some speculation that quota purchased now will have valuable processing rights," Mr McCormack said.

Also Read

Kerry Group inidicated during the summer that their suppliers would be entitled to supply u p to 120pc of their current quota when the current milk management system is dismantled in 2015. Carbery is expected to make a similar announcement in the coming weeks, albeit with a potentially higher limit for its suppliers.

However, Mr McCormackcautioned against any major changes to the current system.

"The Department should not make radical changes in order to accommodate one group at the expense of individual farmers who have been involved for some time in a gradual expansion of their herds."

"The ICMSA is strongly of the view that the Minister must keep the matter of an increase in the butterfat adjustment figure to the fore so that we achieve all the relief measures possible at European level," he said.

Meanwhile, trade for autumn calving heifers and cows continues to strengthen. September calving heifers with the capacity to produce 8,000l were freely making €1,600 on average this week, according to Louth-based auctioneer, Michael Taaffe.

"Autumn calving stock have increased in value by about €100/hd each week over the last number of weeks and with the ongoing increase in milk auction prices in the UK, I expect this to continue," said Mr Taaffe.

Despite over-supply gripping the dairy industry here, there is a shortage of the type of stock currently being sought by British and Northern Irish farmers due to the drift from winter milk production systems.

Indo Farming