12 April 2002

Milk production peaks

MILK production in March was the second highest since 1990, but the UK is still unlikely to meet quota, say traders.

The Rural Payments Agency put production at 1.22bn litres – almost 30m litres above the Charles Holt/farmers weekly profile, but still 100m litres below annual quota. "There is a negligible chance of superlevy," says Farm Consultancy Groups Charles Holt.

Temporary conversions of quota from wholesale into direct sales can have a significant impact on the final figures. But trade estimates range from a net gain of 20m-50m litres, which would still the leave the UK at least 50m litres below quota.

The milk quota market remains unaffected, with 4% butterfat leasing at about 2.6p/litre, and sales at 18p/litre. But Duncan Clark of broker DCFM expects plenty of spring milk to support the market. &#42