29 March 1996

Quota prices plummet

TRADING in used and forward-leased milk quota has virtually stopped as the BSE scare prompts uncertainties over the dairy herds future.

Activity has continued in the clean quota market, however, with values falling to between 70-75p/litre early this week.

But lower prices make this a good time to buy quota, according to Antony Oliphant of consultants, Laurence Gould.

Farmers with young herds, or those where BSE has never been a problem, could take advantage of the market, he suggests. It is also a good time for producers to improve their butterfat base.

Any culling policy would, however, reduce the influence of quota on production. Cow prices could then increase as they will become the limiting factor, he says. "In some ways, it would be a dress rehearsal for the end of quotas." &#42