A collapse in the price of leased quota indicates that not even milk producers expect to need to rent the use of quota in the current quota year. For the week ending November 3, broker Ian Potter was quoting leased quota rates of 1.6 pence per litre, compared to 2.3ppl the previous week, 4ppl a month ago and 7.2ppl this time last year. Intervention Board figures back up this increasingly tight outlook, with a 2.48% gap against quota profile for September and cumulative deliveries of 7,004.8m litres. With cattle across the country having been brought in, output is now heavily dependent on silage quality. Digging into stocks this early in the year may also lead to a feed gap in the early spring. In a normal year this would help to hold back output in the dying days of the quota year, but next year it won't be necessary. The strength of sterling against the euro does give manufacturers some scope for buying raw milk abroad, but there are signs the Continental spot market is almost as firm as the UK's. Worth little more than 59p against sterling at the end of last week and 4p weaker than this time last year, the euro is sagging as weakly as ever. The result is that the target price, from which the other CAP benchmarks are set, has faded from 20ppl this time last year to 18.95ppl. {{PROVISIONS }}

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