Desire to fill milk quota fuels rise in dairystock values

26 February 1999

Desire to fill milk quota fuels rise in dairystock values

By Tim Relf

DAIRYSTOCK prices are rising as farmers snap up animals to fill milk quota.

"Theres a lot more interest," says Gloucester auctioneer Keith Flemington, who reckons values could be up £100-plus on pre-Christmas levels. "Theyre after the milk."

Prices averaged £420 when an unrecorded, commercial, year-round calving herd was dispersed at Gloucester on Monday. "There must have been more than 100 people around the ring – and they werent just sightseers," says Mr Flemington. Top bid was £625.

Derek Biss of Greenslade Taylor Hunt has also seen demand on the up. "Trade has jumped – and its quota-fuelled," he says.

Youngstock prices, meanwhile, "are set to rocket", according to Mr Biss, with fewer calves and yearlings likely to be on offer this year, reflecting the trend towards flying herds.

But a lack of cash among many farmers will put a lid on bidding, he says. "People are prepared to come and bid up to a certain price – but they are not going to go silly."

Big numbers of dispersals, meanwhile, are in the pipeline for this spring. More farmers will retire for tax reasons and others will leave at this time so they have clean quota left to sell. "Were inundated with sales," says Mr Biss.

Rodney Moody at Chippenham, Wilts, says this weeks Agenda 2000 negotiations will have a big impact on whether farmers leave the business in the months ahead. "Everyone is watching what is going on in Brussels, especially regarding the future of quota."

The best stock is now changing hands at £800 to £900, compared with £600 to £700 earlier in the winter – partly reflecting the current tight supplies, says Mr Moody.

Tom Brooksbank of Norton & Brooksbank says bidding has quickened, as farmers, some of who have lost stock through the BSE and TB culls, look to fill quota.

Milk prices may have not risen, but many still see dairying as a better business than beef or sheep, says Mr Brooksbank. And while some are still ceasing production, many more are gearing up. "Lots of people are wanting to build herds up to between 200 and 300 head."

Chris Reeks at Frome, Somerset, says the rise in values has been most evident among older, milky cows. These, he says, are making £50 to £100 more than before Christmas. "Theres a bit more optimism about everything – and a brighter atmosphere in the market," says Mr Reeks.

His comments follow the dispersal last week of David Hearns 150-head Kerryville herd. There was a "huge" level of interest in this Holstein Friesian outfit from the Isle of Wight, with the freshly-calved and close-to-calving cows and heifers most sought after.

The non-recorded, 6300 litre-yielding, loose-housed stock sold to 720gns, with 95 cows and heifers averaging £500. Youngstock sold to 372gns for a 14-month-old unserved heifer by Eastview Meadowlord. &#42

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