Stand-off in quota trade
TWO contradictory forces are at play in the milk quota market.
On the one hand, milk production continues to be stifled by the atrocious "summer" weather. Latest Intervention Board figures show that June output was again below quota and cumulatively the UK is now 16m litres behind schedule.
The hawks suggest that simply reflects the fact the Intervention Board has adjusted the profile to put more quota in the first three months of the milk year. But the doves point out that, compared with last year, milk output is already 143m litres down.
The other consideration is Milk Marques selling round, which should lead to bigger milk cheques. Potential lessors believe quota values should improve in the coming weeks.
But this is being down-played by milk market analysts who say the chances of Milk Marque extracting the extra 2p/litre it is after from the dairy trade are minimal.
Leasing values are static at between 6.5p to 7.5p/litre. *