Quota prices on the up?

By Olivia Cooper

LEASED quota prices have continued to slide this week, falling by 0.1ppl.

This follows the steady downward trend for leased quota in the past month, falling by 0.5ppl off near rock-bottom levels.

“Quota is cheap, but because it is not needed until April trade is very slow,” says Tony Carver, of property consultants Carver Knowles

But there is some hope that near-target milk production in June will lift prices.

Mr Carver anticipates that June milk output figures will be 35-40m litres above last years figure of 1.168bn litres.

“With milk prices much better than last season, and current production well behind profile, there is more incentive for farmers to produce as much milk as possible.

“If we can produce 30m litres a month above last seasons output, reaching the quota target is not as inconceivable as it was six weeks ago,” he adds.

But with production so low in the key months of April and May there is a very large deficit to make up.

Mr Carver reckons that at 0.6ppl for 3.78% butterfat milk, the base of the market is not far off, unless poor weather lowers production once again.

He advises those who are likely to exceed their quota to lease as its cheap insurance against the 22ppl fine for overproduction.

Quota sales remain in the doldrums. Although there is plenty of demand for used quota, there are few voluntary herd sales taking place.

Farmers who have had their herds culled through foot-and-mouth are holding off the market until current prices improve.

Even so quota sale values have crept up slightly to a butterfat-adjusted 13.7ppl.

June production figures are due to be released by the Intervention Board on Friday, 6 June.