Quota prices fall as supplies increase

By FWi staff

A BOOM in the amount of milk quota coming being offered for sale has pushed prices lower. The price of clean bought quota has fallen 0.25p to 34.84ppl and agents say values could fall further in the short-term.

The volume of quota coming on to the market last week increased by 30%. The sudden increase in supply coincided with a drop in demand and prices are expected to fall further over the next fortnight.

The reduction in quota prices is likely to encourage more buyers, said traders.

“If clean milk quota prices continue to fall as we have seen recently, and leasing prices remain relatively firm, I expect more people to purchase quota,” said Mark Bray of agents ADAS Quota Direct.

The volume of leased quota coming onto the market has also increased, said agents Ian Potter Associates. But demand remains steady and prices have so far fallen only slightly. Leased quota at 4% butterfat is now on offer at 7.37ppl.

Trade is now starting to pick up after a slow start to the milk year, said Rachel Rutter of traders Wright Manley, Shropshire.

“At the last few auctions weve had, weve seen larger blocks being sold and this may effect the price,” said Ms Rutter.

The quantity of used quota coming on to the market remains limited but demand remains strong, she added.