June farmgate milk prices plumbed the depths this summer, at 15.34ppl ­ nearly 2ppl less than the same month last year. Quota sales ­ one of the few reliable markers of producer confidence in the sector ­ are closely matching supply and demand. This could be taken as a sign of returning optimism, but there is no sign of quota prices going up due to growing demand for capacity. The fact that quota is being bought steadily suggests that at least capacity is changing hands at about the rate at which producers are leaving dairying. But the market is settling at rates just over half those of a year ago. Output is still below the quota profile: cumulative production figures to the end of July shows a gap of just over 160 million litres at 3.93% butterfat. As milk supplies start their seasonal downward drift, there is more chance of finishing the quota year under -quota ­ this would have been unthinkable last year. {{PROVISIONS }}