Lakeland Dairies has told its suppliers that superlevy fines of 28.66c per litre over quota are now inevitable, following an 18.5% increase in January milk output versus this time last year.
The Cavan-based processor is currently 3.7% over quota, which is approximately 15m litres over the collective quota allocation of its membership, with six weeks of production still to go until the March 31 deadline. With the supply for February to date also up on last year’s equivalent, Lakeland has told its members that fines will be unavoidable.
“It is important that all over-quota suppliers do all they can to reduce the massive superlevy exposure and reduce the fines that will have to be paid to the EU,” said Lakeland’s latest Farm Notes newsletter.
“Provisional superlevy deductions have increased and are continuing from suppliers over their full quota. It is the responsibility of each supplier to manager their quota.”
The processor informed its members that flexi milk (unused quota) will be distributed as per Department of Agriculture rules, 85% of flexi milk to those in the less than 350,000 litre category and 15% to those in the over 350,000 litre category.
“The distribution will be on a flat rate basis in each category until all the flexi milk is used. Therefore, those suppliers who are still over quota after flexi milk will pay the fine of 28.66 cent per litre on what litres they are over,” Lakeland stated.
With most Irish co-ops in a similar over-quota situation, processors have been withholding estimated fines from milk cheques for several months. With a milk price of up to 40cpl being offered by some co-ops, the volumes being delivered may continue to rise for the next six weeks.
However, Agriculture Minister Simon Coveney urged suppliers to continue their efforts to reduce output, adding that any corrective action over the remaining weeks will help in mitigating a superlevy fine.
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