Slow trade in milk quota leasing

By FWi staff

THERE has been little interest in forward leasing since the start of the year and demand remains minimal.

The volume of quota entering the market has been constant and continues to increase by the week, although little trading has taken place.

Forward leasing of 4% butterfat is currently entering the market at 7.5ppl.

Leasing prices for 1999/2000 will hold up well if the UK meets quota for 1998/99, said Mark Dyson of Exeter-based Townsend Chartered Surveyors.

“However, if it does not then the prospects for next year will be bleak. More lessors than usual are `hedging and leasing some of their quota early,” he said.

Brisk trade last week firmed the purchase price of quota to 42ppl, said a spokesman from ADAS quota direct.

“But with increased supply and the reluctance to pay these prices, the position has eased,” he said.

Quota of 4% butterfat has now slipped back at 40.5ppl and 3.79% at 38ppl.

Prices will be greatly affected by the weekly and monthly production figures, said Mr Dyson.

“Any sign that these are falling below profile will cause a collapse in the price.”

But the figures in January appear to be steadily rising, suggesting that the UK may just meet quota, although the margin will be close, he said.

Demand and supply continues to be steady for used quota sales and prices are relatively stable.

But a spokesman from Lovedays Quota Agents warned that there is little used quota available and advised potential sellers of both clean and used quota that they should act sooner rather than later.

Used quota is entering the market at 33ppl for 4% butterfat and 3.82% at 31ppl.

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