27 November 1998

Milk quota price lull

FURTHER rises in milk quota prices are unlikely, say agents.

"Theres no margin for it to go any more expensive," says Mark Webb of Lovedays, who saw an 8.37p/litre average at a Lancaster auction last week.

Andy Knight of Howkins and Harrison at Rugby – where a Monday auction averaged 8.3p/litre – says the market is quiet. Those looking, he says, are waiting to see how far it will fall, prompting the usual mid-November lull. "The markets definitely falling and could go further."

Consultant Charles Holt says values should be below 8p/litre. "A lot of farmers are not happy with the way cows are milking."

Silage crops have been poor and, in the face of tight cashflows, producers have "traded down" on concentrates. "So the cows have been hit from both angles. Milk production could easily be 20-30m litres below profile for November."

A spokesman for auctioneers Frank R Marshall in Cheshire, however, says less quota is on offer nationally than is usual at the end of the season. No great volumes are expected to appear in the last month of the 1998 trading period.

Mondays auction at Chelford saw a top of 9p/litre for 4.31% butterfat quota. Samples of 3.6-3.7% were making 7.5 to 7.6p/litre, with 3.8-3.9% about 8p/litre. &#42