December milk up but still sub-quota

10 January 1997

December milk up but still sub-quota

DECEMBER milk production has failed to meet quota, despite record butterfats (4.22%) and weekly gains in actual output.

Latest figures from the Intervention Board put butterfat adjusted deliveries for the month at 1.139bn litres, up some 73m litres on November, but still 6m litres (0.49%) below the monthly quota.

With just three months remaining in the current milk year, the cumulative deficit now stands at 70m litres (0.66%) compared with 64m litres at the end of last month. And compared with a year ago, output is lagging behind by some 130m litres.

The big question remains – will there be super-levy to pay in 1996/97?

At the end of November, quota broker Ian Potter estimated that output would have to increase by 2.5m litres every week for the rest of the season. This was achieved in the first half of December, but the cold snap led to a slowing down at the end of the month.

With December figures showing a bigger cumulative shortfall than November, and with one month less to go, that output target will have increased. There must therefore be some doubt as to whether quota can be achieved.

There is also the question of the selective cull. Parliamentary delays mean this is now unlikely to get under way until March, but it could still have a significant impact if national output is close to quota.

If quota is not exceeded at national level, then no one will pay super-levy, regardless of whether their individual buyer is over quota. That will be a relief to those that have gambled on going over, but an annoyance to those who covered in extra quota when the leasing market peaked at 18p in September.

And if quota is triggered, the penalty will be less severe than last season when it hit 31.42p/litre. The green £ revaluation expected next weekend will take it down to about 28.5p/litre.

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