End of February national milk supplies bucked the downward trend established for November, December and January and actually increased relative to 2014 supplies. With one month left to the end of EU milk quotas, the country will finish February closer to 6% over quota based on information received from our survey of the main milk processors (See Figure 1).

All processors report early February milk supplies were down relative to 2014, but late February supplies increased above 2014 levies, pushing the country closer towards a massive superlevy bill.

The majority of processors expected over-quota farmers to significantly reduce February supplies, but this didn’t happen. Some processors are within days of filling their quota, yet from today (Thursday), we still have 26 days of the last quota year left.

In previous years, it was a case of what happened milk supplies in the last week of March, but most processors are so far over quota, the last two to three weeks of March are now the issue.

Surge

Most of the southern processors allocate about 10% of the annual quota to the month of February, so the late February surge in milk supplied will have a bearing on the annual figures.

Speaking to the processors, there is significant unease and confusion about how to handle the superlevy fine. Some processors have a policy of retaining some part of the fine once a farmer exceeds their farm quota, while others are slow to carry the cost and act as a banker to the farmer.

None of the processors has received any details yet from Brussels of any change to superlevy payments. Many of the processors have already retained 50% of the levy from farmers and are now in limbo about the next step if the fine repayment is to be spread out over a longer time frame (see panel).

Those processors who make payments before the 20th of the month are running out of time and will need details next week if they are to include any changes in milk cheques to affected farmers.

If the quota year ended in February, it would mean Irish dairy farmers would face a superlevy bill of over €80m.

End of February reports

Glanbia estimates it is now 6.2% over quota (68m litres over) and similar to other co-ops, February supply is ahead of the same period last year, running about 3% ahead of February 2014. Premier, the other arm of Glanbia, is 3.7% or 10m litres over quota.

Kerry estimates it will be 4.5% over at the end of February, which equates to 39m litres. They were just 4.5m litres over quota this time last year.

Dairygold estimates that it is 7% over quota at the end of February.

In the north and northwest, Aurivo is still 3% over quota year to date. February supplies were only down 5%.

Near neighbour Lakeland reports early February supplies were back 8%, but late February milk supplies were up 11% relative to 2014, so it will end February about 2% up on last year. Early estimates suggest Lakeland are close to 8% over quota at end of February and if milk supplies continue, they will be over quota by 25-26m litres.

Arrabawn estimates it will end February close to 10% over quota and if supplies continue it will fill its quota in the next few days. Late February milk supplies were up 8%.

Centenary Thurles is estimating it will end February about 8% over quota.

Tipperary Co-op estimates it will finish about 6% over quota at the end of February.

Wexford estimates it finished February 2% over quota.

In west Cork, Drinagh estimates it will finish 6.8% over at the end of February.

Barryroe estimates it will finish February about 6% over quota and milk supplies are up relative to last year and rising.

Lisavaird estimates it will finish February about 5% over quota and milk supplies are 4% over the volumes delivered for the same period last year.

Bandon Co-op’s end-of-February position is 6.4% over quota and currently February milk supplies are up 4% relative to the same period last year.

Department of Agriculture milk supply figures for the month of February to compare with the above analysis will be available in three weeks’ time.

The Department has announced that based on estimated milk deliveries as submitted by milk purchasers for the period up to 31 January 2015, Ireland is 5.47% over quota when account is taken of the butterfat content of milk deliveries during the same period.