Quota demand gives a boost to the market

By FWi staff

INTEREST in quota markets has really picked up over the last couple of weeks, resulting in a firming of values.

Quota agents are reporting that demand for leased quota is outweighing supply, so that a number of lessors are holding out for 7ppl.

At auctions this week 4% butterfat made about 6ppl, with 3.89% at 5.7ppl.

But a number of agents believe that values have now started to peak with buyers unprepared to pay these higher values.

The sale of clean quota has also risen as vendors seek higher prices. But as with leased quota, buyers are unprepared to pay the more expensive prices.

As a result only competitively priced quota is trading, said a spokesman from ADAS Quota Direct.

A stand-off has started to develop in this market as vendors refuse to lower their prices and purchases wait to see if values fall in the wake of lower milk prices.

Quota of 4% butterfat is trading at 30ppl while 3.78% is at 27.25ppl.

Used quota sale prices continue to shadow clean prices, noted a spokesman from-Exeter based Townsend quota agents: “Limited supply has curbed volumes recently.”

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