By FWi staff

THE lease quota market has virtually come to an end for this milk year, following the release of latest provisional production figures from the Intervention Board.

“Lease quota is dead in the water and almost valueless,” says Peter Weston Davies of the Farm Consultancy Group. “Last week at auction some fetched as little as 0.1ppl.”

But contracts for the new milk year are already under way.

“The first deals were about 3.25ppl for 3.7% butterfat.

“It has now dropped to 3ppl but there isnt an enormous demand. Many are waiting until it falls to about 2ppl,” says Mr Weston Davies.

Bruton Knowles has also started trading lease quota for the next milk year, at 3.5ppl for a 4% butterfat.

“There is definitely more demand for the 2001 season with lessors seeing it as a good investment,” says BKs Jonathan Smith.

quota link Bruton Knowles

“Producers will not be holding back on milk production and with prospects of a better milk price in the coming months margins could be looking healthier.”

Healthy demand for sales quota is supporting prices at about 18-19ppl for 4% butterfat, says Mr Weston Davies.

“Prices will remain firm and may even drop a little.

“Although it is difficult to find at the moment, we will start to see quota coming on to the market into next month as the end of February deadline approaches.

“A lot of sellers still have to get rid of quota, either for tax purposes or pressure from the bank manager, and I dont think they realise how soon the deadline is.”