Farm Ireland

Friday 23 February 2018

Milk production hits record levels

Darragh McCullough

Darragh McCullough

Milk production has hit record levels in many parts of the country over the past six weeks.

Ideal grazing conditions combined with supplies carried over from the end of March sent deliveries soaring in every co-op last month.

Kerry, Lakeland and Connacht Gold all experienced 25pc surges in supplies for April. A survey of the major co-ops shows that supplies are up nationally (21pc average) for the first month of the quota year.

While the jump in supplies has been boosted by the fact that milk production was constrained by poor grass growth last year, processors have still become extremely concerned about the superlevy situation for this year.

"We're already asking serious questions of farmers," said Arrabawn CEO Conor Ryan.

His co-op is already 10pc over quota, despite having no carryover of milk from March.

"We had no quota concerns last year so we put every drop of milk produced in March through the system," he said. "But following a board meeting [last week], we will have a letter going out to suppliers this month stating that if there is no change in the supply trends by the end of May, we will be forced to consider withholding milk payments as early as June or July."

Glanbia is considering taking similar action with its suppliers that appear to be heading over quota. It has been suggested that suppliers that produced 50,000ga more than their allocated quota last year will be the first targets for milk cheque deductions.

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Most of the other co-ops contacted said that they would not be deducting payments until suppliers had filled their entire annual quota.

Glanbia saw supplies surge by 27pc in the first week of April, some of which was due to milk that was held over from the previous week as suppliers attempted to reduce their exposure to superlevy fines. While the increase for the entire month was lower at 16pc, the company's processing plant at Ballyragget was still forced to switch to lower-value products in order to quickly get supplies through the system. As a result, processing of fat-filled powders for the African market was reduced in favour of increasing skim milk powder output.

A Dairygold spokesman said that even though the increases this month looked less impressive, they were still considerable due to the excellent production the co-op experienced during the same period last year.

All co-ops are experiencing peak supplies around two weeks earlier than usual this year, with those based in the southern half of the country expecting an easing of supplies in the next week.

During the peak, milk was being trucked extensively around the country as co-ops struggled to match intake to processing capacity. Kerry reported that it took extra volumes from both Dairygold and North Cork for processing through its Newmarket plant. A night-time electricity outage in Arrabawn last week put added pressure on an already strained system.

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