Leased quota market hots up

By FWi staff

WITH producers now looking to lease out surplus quota the volume coming on to the market has increased this week, reports ADAS Quota Direct.

But some producers are still holding back – even though the leasing deadline fast approaches – in anticipation of a fall in the quota price, a spokesman said.

Trade sources reckon the price is unlikely to fall. The leasing trade was on fire last week, said a spokesman from Lovedays Quota Agents. “And the current position is that there is also starting to be a scarcity of quota available to lease as well as fewer lessees,” he said.

This was echoed by Mark Dyson of Townsend Chartered Surveyors, who said that prices have continued to rise during the week. “It seems that the production figures are not low enough to suggest that the UK will go under quota for this year,” he said.

“Producers still need to cover their own production before 31 December, which causes demand to remain high. With dwindling supplies, it seems that the leasing price will continue to rise.”

ADAS says that prices have eased slightly this week, with 4% butterfat falling to 8.4ppl and 3,80% at 8ppl.

There has been little change in the purchase market, and both supply and demand have remained steady. Weekly production figures up to 5 December show a small increase of 1 million litres on the previous week. But at this level, production remains below profile and this will be a key factor in how the market develops.

Clean milk quota values remained steady, with 4%butterfat at 37.8ppl and 3.75% at 35ppl.

Used milk quota prices have shown some indication that they may have peaked for now, said Mr Dyson. Despite short supply, prices have remained stable with 4% butterfat at 31.5ppl.

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