Fears of milk levy penalty ease after winter intake slows
However, a prudent approach to production will be needed all the way to the end of the marketing year on March 31, to avoid a super levy bill.
Official figures for intake at the processors to the beginning of December showed that when adjusted for butterfat, the country was 0.4% under its year-to-date milk quota, thus reversing the summer and early autumn pattern of over-production.
A number of factors combined to change the milk quota position.
Producers responded to the prospect of very little, if any, milk quota being available under the final phase of temporary leasing.
This is due to dairy farmers retaining their full quotas to qualify for the maximum dairy premium on quota held at March 31, 2005.
Normally, many dairy farmers would have relied on quota made available in the last phase of temporary leasing to solve some of their over-production problems.
They couldn’t do that this year, and have also responded to the expected drying up of flexi-milk availability.
With the ending of the slaughter premium on December 31, farmers who were over-quota and saw poor prospects of avoiding a super levy penalty opted for early culling of cows, which was confirmed by the high kill of cows at export factories during the final months of last year.
The milk processing figures to the end of December should be available this weekend.
They are likely to confirm a further slight improvement in the quota situation.
But, with three months left in the EU milk production year, the calving pattern and production pattern in February and March will be critical to the final quota outcome for the year.
Producers are being warned against any complacency which could leave the industry with a super levy bill after March 31.
