MILK DELIVERIES were below quota profile again in December, adding to the widely-held belief that dairy farmers need not fear overproduction.

Provisional figures from the Rural Payments Agency put deliveries at 1.11bn litres.

When adjusted for butterfat, deliveries in December fell 12.8m litres short of the Charles Holt/Farmers Weekly profile.

With nine months of the milk year already gone, the shortfall compared to quota has grown to 215m butterfat-adjusted litres.

Quota values have been in gentle decline since Christmas, with both supply and demand drying up. What trades there have been saw prices for 4% leased quota slip to 6.4p/litre.

Charles Holt of the Farm Consultancy Group said that farmers either had the quota they wanted already, or lacked the cash to buy more.

Even the recent trend of Welsh, Scottish and Northern Irish farmers investing in English quota to garner single farm payment entitlements has slowed.