Milk output over quota for first time in August

By Robert Harris

MONTHLY milk production exceeded quota for the first time this milk year during August, according to the latest Intervention Board figures.

Provisional estimates show almost 1.145bn butterfat-adjusted litres of milk were delivered to purchasers during the month, 6.3m litres, or 0.55%, over profile.

But despite further gains from a small upward revision in July output, cumulative production for the milk year remains well below quota. The shortfall is more than 148m litres almost four days supply. This time last year, output was 106m litres over quota.

Quota prices have held up as a result. Leased 4% butterfat quota supplies are trading at 4p/litre.

Peter Weston-Davies of the Farm Consultancy Group says: Agents put up leasing prices by 0.5p/litre since the start of the week, as they have done every time the production figures have been due out.

When the output figures were well under quota, they let themselves be beaten down by the same amount. Now they will make every effort to see that the rise sticks.

If you need some, cover some requirement now. But dont stick all your eggs in one basket.

Mr Weston-Davies reckons sales quota is 19.5p/litre for 4% butterfat up 2p/litre on the month.

Cumulative production to the end of August is about 100m litres below the level seen in 1998, a year when the UK only just made quota, he says. But this autumn, a lot of cows will be offered silage of questionable quality, and many farmers will struggle to buy extra feed.

There is no doubt that farmers should be paid more for milk, says independent consultant Mike Bessey, who reckons that 2000 could be one of the best years for the EU dairy industry in the past decade.

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