March deadline dampens quota trading

By FWi staff

THE milk quota market is unseasonably quiet after the trading deadline was extended to the end of March.

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Bruton Knowles

The last week of the year has traditionally been the busiest for milk quota trading as producers rush to secure deals before the 31 December deadline.

But this year, quota agents have been enjoying an extended holiday, with little activity or demand from farmers last week, reports ADAS Quota Direct.

“The lease market has been very quiet, and early indications suggest that there maybe up to 100 million litres of wholesale quota that could get converted to direct sale quota,” says ADAS David Pettit.

“Clearly if this were to happen, it could have an impact on the year-end quota position, but a better indication will not be known until late May.”

In the purchase market, prices have remained stable throughout the last part of December.

“Many commentators are expecting more quota to come on to the market in the next few weeks, but remain uncertain of the effect this may have on price as most farmers appear to be buying now for use in one or two years time,” says Mr Pettit.

Leased 4.04% butterfat quota is trading at 0.5ppl with 3.69% butterfat at 0.3ppl.

Clean quota sales are trading at 19ppl for 4% butterfat, with 3.92% supplies at 18ppl.

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