Quota price expected to rocket to record level
Published 25/10/2011 | 05:00
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.