BUYERS LIFT LIMITS ON MILK PRODUCTION

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.