2 June 1995

Easier price for leased quota

By Tim Relf

PRICES for leased milk quota have eased as resistance has grown to recent higher values, and farmers, busy silaging, have postponed attempts to find quota.

"We have seen a couple of weeks when not a lot is being taken up," says Justin Lowe, for R B Taylor and Sons of Yeovil. He has seen quota leasing around the 12p/litre level.

"First-cut silage in this area has been poor. And producers, aware that they may not have as much winter feed as they would have hoped, are slightly less bullish in acquiring quota. There is more coming onto the market, too," he says.

James Dick of Hayes, McCubbin and Macfarlanes Aberdeen office, expects the price fluctuations to continue until at least after second-cut silage has been taken. "By then, farmers will be able to calculate their feed and production levels better," he says.

He points out that not all of the cows involved in a dispersal sale are taken out of production. Vendors may postpone trading quota, so the depressive influence of dispersals on the market is less than is sometimes thought, he adds.

In Kent, Roger Lightfoot of Hobbs Parker says that after a week of "madness" which took leasing prices to 15p/litre, values have fallen to about 13p/litre.

"It is amazing how the arrival of milk cheques prompts activity in the market," says Mr Lightfoot.

This years pattern, he suggests, will be of "values rising steadily until the point where the market tumbles – and then rising again."

On sale quota, Mr Lightfoot says there will be less volatility. "But I cant see it dropping beneath 55p/litre ," he adds.