The Quota Exchange Committee (QEC) met on August 29, 2019 to review the current market clearing price model and the quota exchange activity through the 2018-2019 dairy year. The QEC made two recommendations to the Milk Board to support the market environment following the application of all quota related policy changes from the BC Farm Industry Boards QTAR directives.
The BC Milk Marketing Board made the following policy change on September 4, 2019 regrading the value of price movement when a reduction occurs on the conventional quota exchange;
- The removal of 12.1 (c) as the policy is no longer applicable due to policy changes that were applied on December 1, 2017 (NTP Quota Exchange Policy Changes – October 30, 2017)
- The adjustment of the price reduction in 12.2 from $500/kg to $250/kg per exchange to create equity in the amount the quota exchange can increase or decrease in one month.
Calculation of the Market Clearing Price -Conventional Production
(BCMMB C.O- June 6, 2019, Schedule 4 Section 12.1, pg.103)
12. (1) If for each of three consecutive “Conventional Production” Quota Exchanges:
(a) the volume of Continuous Daily Quota subject to offers to sell was greater than 250 kilograms;
(b) the volume of Continuous Daily Quota subject to offers to buy has exceeded the volume of Continuous Daily Quota subject to offers to sell;
(c) the offers to buy have been filled to 50% or less; and
(d) at least one successfully filled offer to buy was from a Person who had not been granted priority status in accordance with these Rules;
the market clearing price shall be increased by $500.00 per kilogram for the next exchange.
(2) If the volume of Continuous Daily Quota subject to offers to sell exceeds the volume of Continuous Daily Quota subject to offers to buy in a Quota Exchange, the market clearing price shall be reduced by $500.00 $250.00 per kilogram for the next Quota Exchange which shall be conducted within weeks.
On December 18, 2019, the Milk Board reviewed and amended the procedure to transfer quota using the quota exchange in the Milk Management System (MMS) in the June 7, 2019 Consolidated Order, to align with policy changes that were applied on August 1, 2019.
For a detailed review of changes, amending orders can be found on the BC Milk Marketing Board website under the Governance Tab/Consolidated Order 2019.
Please contact Zahra Abdalla-Shamji at zabdalla@bcmilk.com with any questions you may have regarding this notice.