Milk quota prices still rising
By Olivia Cooper
MILK quota prices have improved again this week as demand for sales quota continues to exceed supply.
Prices for 4% butterfat sales quota were languishing at 16ppl a fortnight ago, but jumped by 1.5ppl last week, and by another penny earlier this week to 18.5ppl.
“Movement has slowed in the past few days as purchasers decide not to buy at these levels,” says Antonia Hall, quota consultant for BK National Quota Exchange.
“As we get closer to the target figure of 20ppl, some sellers are holding off in the hope of achieving that price. But purchasers wont pay it at the moment.”
“The demand is very much buyers looking to increase herd size in the longer term,” says Ms Hall.
“But those who are leaving the industry are tending to lease out their quota in anticipation of better sale prices in the next year or so; hence the imbalance between supply and demand.”
However, interest has also picked up for leased quota.
Since the production figures came out earlier in the month, prices have lifted from 0.7ppl for 4% butterfat last week, to 0.8ppl today.
Meanwhile, First Milk has announced that its prices will remain unchanged for October, which dashes hopes that the milk market would sustain a rise.
The co-op was hoping for better prices due to the expected shortfall in milk supply this winter, but communications manager Jonathan Horrell says that, with falling commodity prices and strong competition in milk sales, it was a “difficult negotiation”.
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