12 January 1996

Super-levy inevitable?

MILK production continued to run ahead of quota in December, according to latest Intervention Board figures, and super-levy is now starting to look inevitable.

In terms of daily yield, the month was very similar to Novem-ber, at 37.7m litres a day. Butter-fats were down a point at 4.16% but the month still ended 4.74% over quota. That takes the UKs cumulative position for the first nine months of the milk year to 0.85% over quota, equivalent to 89m litres or two-and-a-half days supply.

With cumulative butterfat now at 4.04%, or eight points over base, super-levy is increasingly likely to be triggered. At current green rates the levy would cost over-quota producers 31.42p/litre, almost a penny more than last year due to agrimonetary movements.

Meanwhile, quota transfer figures show the UK is likely to have exceeded last years volume of leasing business.

With the leasing period now finished, attention is shifting to the permanent transfer market. Strong demand and limited availability have prompted a rise in values with 4% clean quota trading at 68p/litre and used quota fetching 55p/litre, according to Exeter-based broker, Townsend. &#42