Clean and used quota prices converge

By FWi staff

THE purchase of clean and used quota has now moved so close that they have all but merged and are now on offer at similar prices.

Clean and used quota is now selling at about 33ppl for 4% butterfat and 31ppl for 3.8% butterfat.

There has been a small surge in demand for clean quota this week, as over-quota producers spotted the opportunity of an insurance policy at an effective cost of 1-2ppl, said a spokesman from Lovedays quota agents.

Demand for used quota is strong, but will be very sensitive to the production figures over the next few weeks as we near the end of the quota year.

The Intervention Board figures for February released show production at 4.6 million litres over profile for the month. But this still leaves the UK 53m litres under for the quota year.

Obviously, therefore, production is increasing and, with all farmers producing as much milk as they can in March for the first time in many years, there is every chance for a surplus in March, said Mark Dyson of Exeter-based Townsend quota agents.

“With an expected 20-30m litres of net temporary conversions from wholesale to direct-sale quota this year. And allowing for some corrections in Februarys production there is still a slim chance that there may be a levy this year,” he said.

More interest has been noted in the forward leasing market, and some lessors are now prepared to accept offers.

Quota is currently trading at 6.5ppl for 3.83% butterfat.

However, a high proportion of quota on offer is still priced above the current market, noted a spokesman from ADAS Quota Direct.

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