Milk production starts to fall

By FWi staff

LATEST Intervention Board figures show milk production has started to slow down.

For June, wholesale milk supply of butterfat-adjusted deliveries compared with quota profile was down 1.26% at 15.4 million litres.

This brings the cumulative data so far this quota year to just 0.51% above quota at 19.6 million litres.

Quality was also down last month. Butterfat at 3.9% compared with 4% at the same time in 1998.

Jim Leamon of Hamiltons national milk quota agents was surprised at the drop in production.

“Its a practical issue of forage. It should have been a grassy season and people have been milking well,” he said.

The production drop could be a reflection that more cows have been sold than bought up, Mr Leamon added.

Quota prices are expected to ease slightly over the next few weeks on the back of these figures.

So far this season, little quota has been traded with buyers reluctant to pay current prices and lessors averse to lease quota below 6ppl.

Lease quota of 4% butterfat is currently trading at about 6.3ppl while quota of 3.69% is 5.7ppl.

Clean quota for sale is selling at 32.5ppl for 4% butterfat and 30ppl for 3.67%.

Mark Dyson of quota agents, Townsend was also surprised at last months lower production figures.

“Individually farmers are saying that their cows are milking well,” he added.

With farmers getting out of dairy production, Mr Dyson said it would be hard not to see a reflection in the production figures.

“If dairies wont pay for milk, it wont get produced. And well start seeing this, he added.

Although quota prices have started to come down, he believed it is due to a greater supply of quota entering the market rather than production.

“Its purely economic,” said Mr Dyson. “When demand drops lessors will have to lower their prices.”

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