November milk leaps back over quota
MILK producers really turned the taps on in November, taking the UK back over quota for the first time since August.
A combination of good margins and mild weather meant that milk yield actually increased (by 1%) last month to 37.6m litres/day at a time of year when the quota profile predicts a sharp downturn (see graph).
Compared with the same month last year, this daily yield was some 5% up, despite the 4% year on year fall in the national dairy herd recorded in the June census.
After adjusting for butterfat, November production came to 1.16bn litres, some 6.6% over quota. Cumulative deliveries for the first eight months of the season now stand at 9.41bn litres, or 39m litres (0.42%) over quota – equivalent to just over one days supply.
A major reason for this sudden turn-around has been the increase in butterfats. In the past two months, the average has increased by 10 points to 4.19%, taking the cumulative figure for the UK to 4.02% – some 6 points over base. For each point over, milk output is effectively raised by 0.18%.
"Despite this turnaround, I still feel confident UK producers will bring production under control," says Tony Carver of Bruton Knowles National Quota Exchange. "We still have plenty of time and I am sure we will end up within a day or twos supply of quota by the end of the current milk year."
Intervention Board figures also show that, following a rush of quota deals in November, both lease and sale volumes are now ahead of last year.
Following last weeks firming of the market to over 15p/litre, lease values dropped back again at the start of this week to about 12p/litre.
But with strong last minute demand, Exeter-based broker Hugh Townsend believed the trading period would end on a high.