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Milk quota prices plummet

- 14 July 2000
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By FWi staff


MILK QUOTA prices have seen a marked drop over the last two days as news of below-quota June production spreads.


Charles Holt Associates have reported leased 3.78% butterfat quota trading at 3.0ppl and 4.0% butterfat at 3.6ppl.


Purchase figures today were 15ppl for 3.78% butterfat, a drop of about 2ppl, with 4.0% butterfat trading at 17ppl.


“Next week could see prices fall even further as farmers continue their reluctance to buy,” said Peter Weston Davies of Charles Holt.


“Many producers will have only seen Junes production figures today and will be very wary about taking on any more quota.”


Provisional Intervention Board figures put June production 64m litres below profile, taking the cumulative deficit for the milk year to 154m litres.


Quota deals are already 20% behind last years figures, adds Mr. Weston Davies.


“This, together with about 10% more quota available due to outgoers, means that we are struggling to find a home for sales.


“In order for this to shift, prices have to be more realistic.”


ADAS Quota Direct have also seen a drop in purchase price with sales of 4.0% butterfat being offered at 16.5-16.75ppl.


“The latest production figures have had an impact on the market and many clients are holding off,” said a spokeswoman from ADAS Quota Direct.


“But we still dont know how much the price is going to have to fall before producers will start buying again.”


Meanwhile, Ian Potter Associates has reported no apparent price drop.


“The trade is there at the moment. Not until supply outweighs demand will we start to see some change, and this isnt happening at the moment,” said the companys Caroline Carr.

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