Milk suppliers await super-levy

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UK milk suppliers are awaiting confirmation from the Rural Payments
Agency to see if they have exceeded the set quota for milk
production. Earlier in the year, industry bodies calculated that
production levels were exceeding the year before. Today is the end
of the milk year, but farmers will have to wait 10 days to see if
they are to face a super-levy.

The Rural Payments Agency, an executive agency of the Department for Environment, Food and Rural Affairs (Defra), calculated that milk production in the UK for the first nine months of the year was 2.2 per cent higher than the year before.

The Agency predicted that the production levels in October 2003 were 3.6 per cent higher than in October 2002 and the November production was 4.4 per cent higher than the 2002 figure. Throughout the year there was an increase of 251 million litres of milk being produced.

The Dairy Industry Association concluded earlier in the year that farmers would have to cut their production levels substantially in the late months of 2003 and the early months of 2004. The group advised that farmers cut their production levels gradually over those months to avoid facing a super-levy.

MDC Datum, the information service of the UK's Milk Development Council, reported that milk production was falling at the beginning of 2004, which was a promising sign for those producers trying to avoid paying a super-levy.

It will be 10 days before farmers find out if they are required to pay a super-levy. The RPA estimates that those who exceed the quota will be made to pay around 25 pence per litre of milk.

Some argue that the surge in the amount of milk produced in the UK was a result of the exceptional early spring in 2003.

Farmers fear that if they have breached the quota this year it could affect the amount companies pay for milk that they have produced.

Related topics Markets Fresh Milk

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