Superlevy fine to hit €30-40m
Dairy farmers are facing a superlevy fine of between €30m and €40m this year, the ICMSA has predicted.
This is more than double the €16m fine imposed in 2012 when the country was last over quota.
Milk supplies to processors are continuing to run well ahead of normal as dairy farmers look to take advantage of high prices.
With bonuses for milk solids pushing milk prices well over 40c/l, and the price outlook for the first half of this year looking very strong, many farmers are prepared to pay the 28c/l superlevy fine and continue to supply milk even though they are well over quota.
This has resulted in processors such as Kerry and Aurivo being well over quota this year.
"While certain factors remain to be confirmed we are proceeding on the basis that the superlevy will be somewhere between €30m and €40m," said Pat McCormack of ICMSA.
"The fact that Kerry and Aurivo have filled their quotas and drastically reduced the possibility of any fleximilk in a national context has, more or less, decided the final outcome," he added.
The ICMSA warned that a superlevy bill in excess of €30m would do serious damage to cashflow in the dairy sector through the first half of the year.