Weather, price and hope driving on milk supplies

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Record grass growth and strong prices in 2014, coupled with an on-going hope that quotas will be eased before the end of next March, has driven on milk supplies to unprecedented levels.
The latest figures from the Department of Agriculture show that the country was nearly 7pc over quota at the end of September – a full 6.5pc higher than the corresponding point last year – and making a superlevy fine a racing certainty.
The latest figures indicate that dairy farmers have supplied 375m litres more milk so far this year compared to 2013 – when farmers incurred a €10m superlevy fine for producing 36m litres more than the national quota limit.
Dairygold confirmed that their supplies were 3pc higher in September 2014 than 2013. Their intake for the quota year so far is more than 7pc higher than last year.
Milk production is expected to ease dramatically over the coming month, with a 25pc drop in the number of autumn calving cows and deteriorating grazing conditions. However, industry experts said that many farmers are opting to continue milking on the back of abundant grass supplies and a hope that a political decision will ease quota limits before the abolition of the scheme next April.
«It’s a massive gamble to rely on some political decision. At best, there will be some easing of butterfat coefficients, but that will only give us 1-2pc at best,» said Teagasc’s head of livestock research, Padraig French.
Even with plentiful grass supplies, he said that it would be impossible for the vast majority of farmers to cover the cost of production with current milk prices.
«Milk price is back by almost 10c/l to close to 30c/l compared to this time last year. Even if a farmer is getting a 10c/l bonus for milk solids, and able to feed his cows on grass only, he is still not going to cover his costs, especially when you factor in the added cost of loss of condition by keeping the cow milking longer than necessary,» he said. «Many farmers think that the superlevy fine is 28.5c/l, but when the higher butterfat content is factored in, it actually comes out closer to 30c/l.»
«The priority for every farmer should be to protect cow condition and grass supplies for next spring. Whether they milk on or not, is up to the farmer themselves. But they should be under no illusions – if they feeding anything other than grazed grass to keep the milk flowing, they are definitely losing money,» he said.
With many suppliers already in breach of their quota limits, dairy processors have put in place payments plans to deal with the impending fines. Both Dairygold and Lakeland Dairies have offered to allow farmers to spread the bill over two years, with just over 50pc due to be paid in 2015.
The ICMSA deputy president, Pat McCormack, said that the looming fines would present a challenge to cash-flows comparable to spring 2013 for the farmers affected.
«The amount of flexi-milk will be minuscule and the likelihood is that producers under 350,000 litres will also find themselves very exposed,» he said. Mr McCormack added that the possibility of a «last minute miracle being produced at European level» needed to be quashed.
Speaking after an emergency meeting of the IFA’s national dairy committee, Sean O’Leary said that returns for the month of September did not warrant the recent 2-3c/l price cuts. He added that the IDB index for September justified 33.9c/l.
 
 
Source: Indepent

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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