Booming milk production 'could trigger cash flow problems' for dairy farmers
Figures just released show that provisional milk production for March 2014 was 135 million litres, or 12.1 per cent, higher than in March 2013.
That is above the 11.87 per cent increase required to take the UK to its EU milk quota in 2014-15, triggering a super levy penalty for farmers exceeding individual quotas.
Richard Barnett, managing partner at Cheshire-based accountants Howard Worth and a member of the UK200Group’s agriculture special interest group, said: “Should the UK maintain the level of production seen in March, there is certainly the potential for quota to be exceeded. Clearly there is a long way to go yet and farmers are adept at putting a brake on production if required.
“The dairy sector has benefited from higher milk prices, which have encouraged farmers to invest and expand operations.
“But the cloud surrounding the silver lining of higher earnings is that the resulting increase in milk output could see buyers withholding the super levy element of milk cheques from farmers were their quotas now to be exceeded.
“Super levy deductions could have a significant impact on cash flow for these farmers, which could leave them looking for other funding sources to tide them over. Farmers could find themselves facing a delicate balancing act over the next 12 months.
“The market for milk quota has suddenly woken up after a long period with little activity. Milk quota is now trading at around 2p a litre, around 20 times higher than the level at which it closed the previous year.”
No comments posted yet. Be the first to post a comment
Please enter your name
Please enter your comment
Your comment submitted successfully.Please wait for admin approval.
Some error on your process.Please try one more time.
Scotland’s Rural Affairs Secretary Richard Lochhead is calling on the Europ...
As the country settles down following the turmoil of the general election, ...
New research from the Universities of Bristol and Cambridge has found that ...
A new publication to help farmers prevent sheep lameness and offer advice o...
The Farmers’ Union of Wales is putting the spotlight on Liver fluke at next...
The UK is now third in the global rankings for utility-scale solar energy a...
A recent Rural Watch demonstration and information event gave Farmers’ Unio...
Retailers should confirm their commitments to sourcing UK lamb this season,...
A leading retailer has apologised after selling imported lamb in a Borders ...