28 November 1997

Milk quota set to fall back again?

By Tim Relf

WHAT goes up must come down – true of Newtons apple and, so it seems, of milk quota leasing prices.

Recent auctions put average values at about the 9p/litre-mark. But quieter markets this week are leading some to suggest the recent rally in values has run out of steam.

Demand has again eased, says Tony Carver of West Midlands agents Carver Knowles. Better weather kept farmers busy outside late last week, he suggests, while IACS cheques are no longer fresh on the doorstep and the latest milk cheque has probably been spent.

The downturn in activity followed a busy spell. A period when, according to Mr Carver, the window shopping had stopped. "It was as if someone had fired the starting gun."

But now there is little scope for leasing values to rise again before the trading period closes on Dec 31.

"Theres still a lot of quota left to come onto the market, partly because active milk producers have left their fine-tuning to the end of the year."

Justin Lowe of Greenslade Taylor Hunt in Yeovil was also talking on Tuesday of fewer inquiries. "People are anticipating more will come on the market and have stopped panicking," he says.

There could, however, be another surge of activity in December, with the release of November milk output figures and the prospect of another milk cheque on the horizon, says Mr Lowe.

All the same, a lot of quota will probably trade at between 8p and 9p/litre. "People are reluctant to pay more than this," he says.

&#8226 On Monday (Nov 24), Frank R Marshall leased 1.11m litres at Chelford, Cheshire to average 9.07p/litre. Howkins and Harrison, meanwhile, saw 1.08m litres average 9.1p/litre at Rugby.n