By Olivia Cooper
MILK quota prices have surged in the past few weeks to 22ppl – a sale level not seen since September last year.
Increasing confidence that milk production will be over quota next year means dairy farmers are looking to purchase quota, pushing prices up by 1ppl this week, totalling a rise of almost 3ppl in a month.
“Cashflow has improved with the better milk prices this summer, and many farmers are looking forward to plan for next years potentially big production,” says ADASs David Pettitt.
“Interest in forward leasing is strong for the same reasons, and 4% butterfat quota is trading for 3-3.5ppl,” he adds.
Meanwhile, weekly milk production has been strong, and Mr Pettitt expects Fridays (7 December) November production figures to be close to slightly above the estimated profile.
“Earlier in the year, people were predicting that we would be 450m litres below quota.
This is now looking more like 100m litres below, and lessees are taking some cover, pushing 4% prices up to 1ppl.”
If Fridays Rural Payment Agency (formerly Intervention Board) figures bring few surprises, leasing is likely to continue at about 1ppl, says Mr Pettitt.
Sale prices will see-saw, but should continue to creep up for the foreseeable future, he adds.