Super levy fears rising yet again
Fears of a super levy fine for producers in the current production year have been increasing since the end of the calendar year in December as supplies to processors showed a continual increase over last year’s intake.
Production was aided by favourable weather in January and February, with increases in production over last year of up to 20% being recorded with renewed concern for the final outcome for the year and the threat of a super levy penalty looming once again.
Most up-to-date estimates are that the country could be up to four million gallons over quota at the end of the quota year on March 31, with producers facing a multi-million euro penalty.
for over production.
The under quota situation which continued to the end of December last has been gradually eroded since the start of 2003. It is expected that final calculations and adjustment for butterfat to the end of February will bring the country on line with quota for the corresponding period. This follows an increase in January of up to 20% in production and 10% to 15% more being produced in February.
With a high percentage of the spring herds calving down during the second half of February and March, production is set to increase sharply for the final weeks of the year to the end of the month.
A survey which has been carried out by ICOS found that the supply position to the end of February will be on quota and the situation remains critical for the remainder of the year.
George Kearns, ICOS Dairy Committee Secretary said that it is now obvious that the final position will be extremely tight. There was a surplus of quota of almost 4 million gallons at the end of January, but the favourable weather for production in February has eroded any prospect of coming through with a surplus quota.
As supply builds up through March the best estimate is that the country will be 2m to 4 m gallons over quota.
by the end of the month.
Farmers who are seriously over quota are likely to arrange for holding back on supplies during the final days of the month in an effort to alleviate their own exposure to penalty and the impact which this will have overall is too difficult to estimate.
All producers are being warned to carefully monitor their own situations.
