By FWi Staff
LEASING and sale prices continue to rise as production is now firmly over national quota, said auctioneer Mike Taylor of Barber and Son – and leasing prices are “approaching 10ppl”.
The volume of lease quota being offered on to the market is similar to last week. However, a large amount of this is priced above the market as lessors hold out for further price increases, noted a spokesman from ADAS Quota Direct.
At Barber and Sons leasing auction on Wednesday (4 November), leasing prices reached 9.8p for 4.15% butterfat, down to 8.7p for 3.7%. The overall average was 9.3p.
“Producers are quite naturally resisting price rises, but the limited supplies are nevertheless pushing prices up, said Mr Taylor. “The sale price now looks very attractive compared to leasing but of course there is the uncertainty over the long term future of quotas.”
The price for 4% butterfat rose to 9.2ppl with 3.78% at 8.5ppl.
Following a period of buoyant trade demand for the purchase of clean quota demand has now fallen slightly. The volume of quota coming onto the market has risen this week.
However, buyers appear averse to pay the higher prices that have been seen recently and the market has levelled. The purchase market for clean quota inched up to 38ppl for 4% butterfat with 3.80% at 35ppl.
Prices for used quota have risen considerably this week, said Mark Dyson of Townsend Quota Plan. “This is because producers are now looking at the value of used quota compared with the likely future leasing price.
“If the price of leasing in the next few years is 8-10ppl or higher, then it makes more sense to invest in a purchase.”
Used quota prices firmed this week with 4% butterfat at 30ppl.