Milk quota prices rocket
By FWi staff
MILK QUOTA prices have soared again this week with leasing prices now as high as 9ppl and sales at 34ppl.
“This week has seen the pain climb to new levels for over quota producers,” said a spokesman from Webb Paton quota agents.
Leased values have risen to levels above the same time last year despite the relentless drop in milk prices.
“As the prices have risen towards 8.0ppl for low fat and over 9.0ppl for 4%, many lessors are now feeling that it has gone as high as it can go and are putting their quota on the market,” said Charles Holt of the Farm Consultancy Group.
“We have never been offered so much quota direct from farmers before.
“This tells me that the availability of milk quota may be about to increase dramatically.”
Mr Holt said there were signs that farmers were putting the brakes on milk production now, rather than wait until February or March, which is the norm in an over quota year.
He believes the quota market has now reached a peak.
“Quota acquirers patience and bank balances have been stretched to the limit and some sense has to come to the market before very long,” said Mr Holt.
But a spokesman from Bruton Knowles national quota agents said that trading at the end of the leasing period will be even more fraught this year.
“Apart from the usual problems such as the Christmas post, the extra Millennium and Christmas holidays will make last minute deals even more risky.
“Lessors and lessees are advised to attend to their requirements before the Christmas break.”
Demand for clean quota has remained steady over the week. But the increase in lease value has raised vendors expectations and prices have climbed.
Little quota is being traded at these prices, according to quota agents. Sales of quota at 4% are selling at 35ppl with 3.73% at 30ppl.
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Used quota has also risen slightly due a number of producers leasing and buying used rather than buying clean quota.
Quota of 4% butterfat is at 24.50ppl and 3.70% is at 21.50ppl.