Milk production continued to lag well behind quota profile in September, according to last week’s provisional Rural Payment Agency figures.
Dairy consultants blamed poor weather and poor grass growth for the shortfall, which fell 16m litres (butterfat-adjusted) below the Charles Holt/Farmers Weekly profile.
The cumulative deficit widened to 239m litres.
Charles Holt of the Farm Consultancy Group said the chances of hitting quota this year were negligible.
“However, silage quality is better than usual, so production could rise through the winter compared to last year.”
But Nick Holt-Martyn, a consultant with the Dairy Group, said this year’s 2.8% decline in cow numbers was not matched by yield improvements and he predicted UK production would stabilise at 13.7bn litres a year.
“While the economics remain difficult, farmers will continue to vote with their feet,” he said.
Milk quota prices have fallen back again, according to Jonathan Smith, head of BK quota services.
He said clean quota was selling at about 5.5p/litre and used at 5p/litre, with leased quota at about 0.6p/litre.
There was little demand for leased cover, he added, and prices could come back even further.
“Everyone wants to buy used quota, but there’s little coming forward.
“I doubt we’ve ever made up this much in the last half of the year before.
So, if dairy farmers want to take a risk, they could take no cover at all, but they need to speak to their milk buyer first.
If the buyer withholds the milk cheque, farmers’ cashflow is going to be affected.”