Penalty to pay for low butterfat

By Robert Harris

FALLING butterfat levels in the national milk supply could trigger unexpected super-levy penalties for some low butterfat producers, warns farm business consultant Andersons.


Over the past five years, UK butterfat content has dropped from 4.08% to 3.98%.

“If this trend continues the UK could fall below its butterfat base – currently 3.97%,” says head of research, Francis Mordaunt.

If national butterfat base is not exceeded, individual producers make no downward adjustment to milk deliveries, but simply compare their volume of delivered milk to their quota.

This would mean low butterfat producers, especially those on “white-water” contracts, could be liable to super-levy which they have avoided in previous years- but only if the UK exceeds its quota, says Mr Mordaunt.

Latest provisional milk output figures from the Intervention Board show that dairy farmers delivered just over 1.14bn litres of milk to processors during August.

This means August output was 9m litres below quota, and the cumulative shortfall now stands at 115m litres.

“My guess is we still wont make quota, although I think milk production is going to start to pick up as producers will be pushing hard,” says consultant Charles Holt.

Quota to lease (4% butterfat) has eased to 0.75pl, and permanent transfer is worth about 15.5p.

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