MILK QUOTA values are already rising sharply only two months into the milk year as farmers try to boost their entitlement to dairy premium payments in an undersupplied market.

Bought quota moved up over 2p/litre on the week (to June 4) to over 16p/litre for 4% butterfat – compared with 9.3p/litre 12 months ago.

Leased quota was up by about a penny to over 9p/litre. Used quota also increased to about 7p/litre.

George Paton of quota broker Webb Paton said prices were being propped up by the mid-term review.

Ian Powell of ADAS Dairy Group said that the dairy premium, which will be based on the amount of quota held on Mar 31, 2005, would be worth about 6p/litre over eight years after modulation in England and double that in Scotland, Wales and Northern Ireland.