EU Fines No Bar to Milk Output Gain as Price Surges: Commodities

Irish dairyman Pat McCormack figures it makes more sense to pay a 20,000-euro ($27,300) fine for producing too much milk than to pass up surging prices and an early start to a jump in European output.

The 36-year-old farmer expanded his herd to 80 cows from 60 two years ago and estimates milk production will exceed his European Union quota by 20 percent at 450,000 liters this year. While output limits imposed in 1984 won’t end until April 2015, EU prices are 17 percent higher on average than a year earlier. Even with the fine, McCormack says he will be profitable and his herd will be ready with more supply when quotas are lifted.