Scepticism over prices

24 August 2000

DAIRY producers should treat advertised milk quota lease prices of 3-3.5p/litre with extreme caution, advises Peter Weston-Davies of the Farm Consultancy Group.

At least three recent auctions he was interested in saw virtually no quota dealt, although those attending would have believed it had all gone under the hammer, he says.

The auctioneers claim that the lessors are putting unrealistic reserves on their quota but Mr Weston-Davies thinks this is not true.

He believes auctioneers want to prevent leased quota slipping below 3p/litre. “When your income is a fixed percentage of the price of the deal, last years 7p/litre looks a lot better than this years 3p” he says. n