26 April 1996

Caution in milk quota market

ACTIVITY in the milk quota market has slackened, after a busy few days last week.

But despite the uncertainty over the extent of any slaughter policy facing the UK dairy herd, average leasing values began the week at just over 12p/litre. Sale values were 58p to 59p/litre for typical butterfats.

Some are delaying selling or leasing-out, anticipating rising prices later. Others suggest a more stringent slaughter policy could knock the bottom out of the market.

But production is likely to start the milk year well up, with cows which would have been destined for the cull ring remaining in milking herds, points out Jonathan Davies at Milk Marque.

Farmers who rely heavily on leasing-in quota have wanted to source some, says Mr Davies. But those who have only, say, a months requirement to find, are taking a wait-and-see approach.