Farm Ireland
Independent.ie

Saturday 25 February 2017

Quota price expected to rocket to record level

Caitriona Murphy

Caitriona Murphy

Massive demand for quota is expected to drive the price to near record levels in the first exchange for 2012/2013 quota year.

While industry experts insist that any estimates for quota prices are purely speculation, it is understood that some Glanbia and Dairygold suppliers have pitched their bids at between 40c/l and 50c/l.

The market-clearing price for quota in Glanbia was 32c/l in the last exchange, while the market-clearing price in Dairygold was 31c/l.

Speculation is mounting that Kerry suppliers will also increase their bids from 5c/l in the last exchange up to 17-18c/l for the 2012/2013 quota year, while other sources have suggested that Kerry quota could command 25-30c/l.

Industry experts predict that quota prices in the next running of the exchange in early December will be roughly split into a northern price of 10-15c/l and a southern price in excess of 40c/l.

Demand for milk quota is expected to exceed supply by more than 18-to-1 in the first round of the quota exchange.

Department of Agriculture officials have confirmed that 4,151 applications have been received from dairy farmers anxious to buy milk quota, but only 222 farmers have indicated that they want to sell quota.

However, IFA dairy expert Catherine Lasquerettes warned that farmers needed to make a considered decision on what they were willing to pay for milk quota.

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"I hope farmers make their decision based on avoiding a superlevy fine of 28.6c/l, versus investing in a quota regime that will end in three years' time," she said.

"Farmers need to think long and hard before buying quota at any price over the superlevy fine," she added.

The ICMSA has called on the Department of Agriculture to provide farmers with up-to-date, accurate and consistent information regarding national milk supply relative to quota.

ICMSA dairy chairman Pat McCormack said farmers were concerned that the Department's figures were much lower than the calculations published by co-ops. He described the inconsistency as incredibly unfair and worrying for those farmers, who, in some cases, were facing massive fines.

Meanwhile, the organisation has insisted that approvals under the Dairy Equipment Scheme must speed up if farmers were to get work completed before cows start calving again.

It is understood that only 160 of the 820 farmers who applied for the scheme have received approval for works.

The ICMSA said most of the investment works could only be done during the dry period between now and January and called on Minister for Agriculture Simon Coveney to issue approvals before the end of October.

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