By FWi staff

CLEAN milk quota sales have surged this week on the back of tight supplies as vendors hold back awaiting higher prices.

With reduced supply and an increase in demand, values climbed to 40ppl for 4% butterfat and 3.73% at 36.8ppl.

But Mark Dyson of Exeter-based Townsend Chartered Surveyors believes that prices have risen again in the light of the higher production figures released for December.

These figures show that producers were two million litres over profile for the month, leaving the UK 39 million litres under profile for the year.

“Most commentators now think that it is likely that the UK will meet quota and, as a result, the unused price will continue a steady increase,” said Mr Dyson.

Demand for used quota remains strong, noted a spokesman from ADAS Quota Direct.

Values for used quota firmed this week with 4% butterfat at 33.5ppl and 3.75% at 30ppl.

With less than a 7p difference between used and clean quota, many believe that a number of farmers will sell used quota to help finance buying clean quota.

Demand continues to be slow for the forward leasing of quota, and with minimal demand and adequate supply, the market remains unsettled as it tries to find its own level, noted an ADAS spokesman.

Leased quota is moving at 7.25ppl for 4% butterfat and 3.94% at 6.9ppl.