IFA dairy chief calls for clarity on superlevy baseline

IFA National Dairy Committee chairman Kevin Kiersey said it had come to his attention that farmers in co-ops which have had little experience of superlevy over the years did not all realise that the superlevy fine applies to butterfat adjusted volumes of milk production, not real volumes.

The difference between the two can be substantial, and it is important that farmers would realise they may not have as much milk quota volume to work with as they think.

“The butterfat adjustment kicks in when your actual butterfat production exceeds or falls below your reference. For every 0.01 per cent that your butterfat production exceeds your reference, the volume of milk you have produced is deemed to be 9 litres more per 1,000 litres produced, leaving you with that much less quota available,” he said.

“Hence, a supplier who has a quota of 350,000 litres, a butterfat reference of 3.58% but a butterfat production of 3.8 per cent, would stand to lose over 69,000 litres of production capacity because of the butterfat adjustment,” he stated.

Mr Kiersey reminded farmers that the Health Check of 2008 provided for a reduction by half of this correction, which was deemed equivalent to a 2 per cent increase in our national milk quota.

“Co-ops routinely provide farmers with butterfat adjusted delivery figures in their monthly milk statements, and farmers should pay particular attention to those to avoid overestimating the quota still available to them to the end of the quota year,” he concluded.


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