Lease quota to beat super-levy
QUOTA leasing prices are low compared with super-levy and milk producers should avoid gambling on the UK ending the year under quota.
Figures announcing that the UK remains under quota (Business, Jan 12) should not deter producers from leasing, believes Ian Browne of the Farm Consultancy Group.
Assuming a large quota threshold could be unwise, now individual milk buyers have their own threshold, it will be different for each one, he adds.
Many producers are not going to fill the quota available to them this year, especially when silage is poor and cow performance is suffering. "But there are producers 100,000 litres or more short of quota and to lease at about 1p/litre seems good insurance against super-levy."
Producers who need quota for this year may be wise to enter the market soon, rather than wait for the end of March, even though quota may almost be given away. "By then, the market could be volatile and it is possible that leasing price could be 10-14p/litre," warns Mr Browne. *