THE DAIRY industry is reacting to December”s milk delivery figures by allowing producers to go further over quota before withholding milk cheques.

Last week, the Charles Holt/farmers weekly butterfat-adjusted profile put overall milk production so far this year at 215m litres below national quota, with nine weeks to go. The news has encouraged dairies and co-ops to conclude that the UK is unlikely to exceed quota.

First Milk has removed its threshold altogether. A spokesman said: “We’ve been watching the RPA figures closely, and the likelihood of fulfilling quota is reduced.” Dairy Crest plans to pay its farmers for production up to 125% of quota. Company secretary Michael Martin said it was simply a nominal figure to avoid unlimited production.

Dairy Farmers of Britain is more cautious, raising the trading allowance from 4% over quota to 8%. And Arla Foods Milk Partnership told its members at the start of January that their allowance had been doubled to 10% over quota.

But all have warned farmers not to indulge in a spring frenzy of milk production unless they wanted a repeat of the 2002 “disaster”, which saw production leap over quota in the closing weeks of the milk year, incurring large fines.