Quota leasing on the slide

31 October 1997

Quota leasing on the slide

MILK quota leasing prices continue to slide downwards, as the December trading deadline looms.

Lower milk values and the production figures, showing September output 3.61% below profile, have contributed to the fall.

Eagerly awaited now are the October output figures – due out late next week – which should give further direction to the quota market.

Two auctions last Friday saw average prices of just over 8p/litre. And on Monday (Oct 27), Frank R Marshalls offering at Chelford saw an average of 7.86p/litre.

Values at this event ranged from 7p for 3.66% butterfat quota to 9.6p for 4.34%.

Frank R Marshalls James Holdroyd says lessors are now setting reserves at a more realistic level and lessees are seeing this as a good time to source at least some of their quota.

As a result, more is changing hands. The latest auction, for example, saw a clearance of over two-thirds, compared with less than half at previous ones.

Milk Marque, meanwhile, has also seen more activity in the leasing market. The co-ops Huw Rees says during the first three weeks of October, volumes were already up 70% on the year-earlier figure for the month.

And the market looks set to become even busier between the release of October milk production figures and the mid-December date at which some agents will stop trading.

"I cant rule out another decline in price, but it could always recover, too, as people chase quota in the last manic days before the deadline," says Mr Rees.n

See more