Milk back on quota after fall in production

By FWi Staff

THE milk quota lease market stabilised over the last week as the volume of leased quota coming on to the market increased.

With a fall in demand, prices have eased slightly. “The market was over-priced anyway,” said Fred Morris of David Clark Agricultural Consultants.

A fall in last months milk production, along with lower auction prices, has also helped push prices back slightly, said Mr Morris. “Were now back on quota for the year.”

Mark Dyson of Townsend Chartered Surveyors agrees with him: “Our estimate from the weekly raw production figures indicate that the UK will be about 20 million litres below profile for October. This brings us on to profile for the year so far.”

However, the actual production figures were only 3.5 million litres below profile. “Butterfat should be taken into account,” said George Paton of Lovedays. “20-30 million litres of over-production was swallowed by butterfat.”

Prices have not fallen further this week, claimed Mr Paton: “Milk quota prices fell last week in anticipation of a lower production profile. The fact is that they havent gone back up following that slump.”

Mr Paton has seen milk quota sold for between 9.0-9.2ppl for 4 % butterfat this week, and today (Tuesday) prices have risen a further 0.2p. “Production has fallen again this week, but butterfat production is rising in the UK, which counteracts any loss in production.”

The value of leased 4% butterfat eased slightly to 8.9ppl, with 3.77% at 8.4ppl.

Sales of clean milk quota remain firm, although the volume of trade has dropped in the last week as vendors are now looking for unrealistically high prices, stressed a spokesman from Alder King.

Unused quota inched up to 39ppl for 4% butterfat and 3.80% at 36ppl.

Used quota prices have risen again this week as producers looking ahead to future years consider that purchasing at 30ppl is better than leasing at 8-9ppl each year, said Mr Dyson. “Supplies are running curiously short considering the number of dispersal sales in progress.”

Used quota prices firmed this week with 4% butterfat climbing to 30ppl.

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