Milk quota year makes a slow start

By FWi staff

THE new quota year remains slow as the market tries to find its own level. But despite a lack of demand prices remain stable.

The lack of confidence in the future milk prices continues to cause many lessees to hold off at these prices, noted a spokesman from ADAS Quota Direct.

Leased quota of 4% butterfat remains static this week at 6.7ppl while 3.70% has eased slightly to 6ppl.

Little changed in the purchase of clean quota over the week as an increase in quota entering the market failed to affect values.

Clean sale purchases inched up slightly at 33ppl for 4% butterfat with 3.80% at 30.5ppl.

With a lack of demand for quota and an increasing supply entering the market one would think that values might slide. But unfortunately the milk quota market doesnt always do what people expect it to, said Strutt and Parkers Ben Sharples.

“Farmers arent focusing on quota at this time of year although I would have thought that they would buy early and make the most of the traditionally cheaper prices,” he added.

Mr Parker does not believe that prices will experience the big peaks and troughs seen in previous years because farmers have had to make cuts in every part of their business. “Theres not the money there to spend on quota as there has been.”

But he believes that quotas will be filled as farmers produce more to try and restrict the impact on their businesses.