Milk quota leasing values ease

By FWi staff

DESPITE strong early production last month, leasing values have eased back slightly.

“Possibly the recent quieter times in this market has encouraged some lessors to ease their expectations,” said a spokesman from Hamiltons, quota agents.

Supply remains similar to last week and demand is steady. Quota of 4% butterfat eased slightly at 6.75ppl with 3.73% at 6.2ppl.

Looking back at the monthly average leasing prices over the last two years shows that quota values fell steadily in 1997 when the UK was above quota, and rose in 1998 when the nation appeared under quota, noted a spokesman from Lovedays Quota Agents.

Having seen this unpredictable market, he believes that there is little enthusiasm for price rises over the next few months.

There has been little change in the purchase market again this week, with buyers reluctant to pay the prices. Despite minimal quota being traded prices have remained stable.

Butterfat of 4% is unchanged at 33.75ppl and 3.61% is at 30.5ppl.

With milk cheques falling this month and lease prices remaining relatively high, producers may be encouraged to purchase quota in the coming year.

With the possibility of quotas continuing until 2008, finance houses now seem slightly more confident to lend over long term to farmers for quota purchase, said a spokesman from Bruton Knowles, national quota agents.

“Indeed some are starting to encourage farmers to secure quota now, maybe fearing a rise in prices towards the end of the year,” he added.

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