Race on to beat quota leasing deal deadline
Race on to beat quota leasing deal deadline
By Simon Wragg
MILK quota leasing deals could come to an abrupt halt next week as brokers start to close offices, many of which will not re-open until after the New Year.
That could leave some farmers scrabbling around for a broker to clinch last minute deals. Early closure has been prompted by concern over lost post, clearance of payments – due to this seasons increase in returned cheques – and the time needed to ensure forms are delivered to the Intervention Board.
For those farmers sending forms and cheques by post, the deadline for many brokers passes today (Dec 17). However, producers able to fax forms and transfer funds electronically (adding £20 to costs) will still find some offices open up to the Dec 31 leasing deadline.
Electronic transfer
ADAS, Bruton Knowles and Paton Webb are among those closing on or before Dec 24. Others including Ian Potter and Charles Holt will trade by electronic transfer to Dec 30. The IB has warned that forms must be mailed on or before this date to be accepted. "Some offices will be open between Christmas and New Year, but anyone leaving it that late is taking a hell of a risk," warns Tony Carver of Carver Knowles.
The market remains frantic after provisional IB figures showed butterfat adjusted deliveries in November neared 1.1bn litres, 4.3m litres over quota. Cumulative production for the milk year is now 140m litres over profile, equivalent to 3.5 days supply.
Pressure on the leasing market remains high. Quoted prices of 9p/litre for 4% supplies are common, though deals have been found "with difficulty" at 8.2p/litre, says Lincoln-based Charles Holt. "Some producers have said enough is enough."
The volume of quota being leased or bought in a single transfer has risen to an equivalent of 66,000 litres (up from 58,300 last year). For permanent transfers the number of transactions has fallen 14% while volume has risen by 25% over the same period to 83,000 litres/deal.
For those priced out the market, super-levy penalties could still be avoided. Production could be pulled back with changes to rations and heavier cull policies before the milk year closes on Mar 31. "A 2%-3% fall in output is needed," says Tony Evans of Andersons. *