Levy dues to blame for quota price dip?

By FWi staff

AGENTS came up with different reasons for a slight drop in milk quota prices this week, as leasing values dropped to 7.38ppl for 4% butterfat.

The market has been directly affected over the last 14 days following the milk cheque, with levy bills arriving on producers doorsteps, said George Paton, quota trader for Lovedays, Swindon.

“In many cases these showed lower thresholds than were expected, and bills were higher. In view of this, money that would have been spent on milk quota has been spent on levy bills.”

But Ian Potter of Ian Potter Associates disagreed: “Although leasing over the past few days has eased, production is near enough on quota and farmers are waiting until September to see what production is like before leasing.”

ADAS Quota Direct reported that demand continues to be steady this week, although increased volumes of leased quota coming on to the market again has contributed to the drop in prices.

The demand for purchased quota remains static this week, and with this prices have weakened. Poor cashflows, levy bills and lack of confidence may well continue to put further downward pressure on this market.