Milk quota lessors busy at auctions

By Farmers Weekly staff

MILK cheques, IACS cheques and talk of impending super-levy have tempted lessors out into the quota market this week.

At auction, 4% quota has been realising 6.7-7ppl, up 0.5p on the week, says Peter Weston-Davies of the Farm Consultancy Group.

“Producers have the impression they have a bit of money in their pockets, and agents are milking super-levy worries.”

In fact, Intervention Board figures show that milk production dropped sharply in the first two weeks of October, down 1.6% and 1.2% on the year respectively.

In September, production was 3.1% higher than in Sept 1998.

But the market seems to be treating it as an anomaly, rather than the start of a trend, says Mr Weston-Davies.

“The last two weeks of September were pretty wet, so this may have had a knock-on effect.”

The feeling is that production will continue apace, he adds. “Farmers dont like cutting back – it is difficult to switch back on again in the new milk year.

“Many farmers report full clamps of good quality silage, and are set to milk like Trojans. Cattle are also available for little more than the burning price, so people are prepared to milk them hard – its cheap milk.”

A glance at our milk price table shows why farmers are adopting that policy. With many companies reducing or finishing seasonality bonuses, milk prices for September show a marked fall, typically of 1-2ppl, on August levels.

“The main distinction is between those companies whose seasonality bonus persists this month, and those for which it does not,” says Stephen Bates of Wye College.

Further price reductions will come into play next month, he adds.

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