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Principal and Interest Required per Litre to Repay Quota Loan

Author: Brian Lang - Dairy Cattle Production Systems Specialist/OMAFRA
Creation Date: 05 April 2002
Last Reviewed: 14 July 2009
Interest Rate at 0%
Quota Price
Length of Loan in Years
$/kg
5 7 10 12 15 20
$20,000
0.427
0.305
0.214
0.178
0.142
0.107
$22,000
0.470
0.336
0.235
0.196
0.157
0.118
$24,000
0.513
0.366
0.256
0.214
0.171
0.128
$26,000
0.556
0.397
0.278
0.232
0.185
0.139

 

Interest Rate at 4%
Quota Price
 Length of Loan in Years
$/kg
5
7 10 12 15 20
$20,000
0.472
0.351
0.260
0.225
0.190
0.155
$22,000
0.519
0.386
0.286
0.247
0.209
0.171
$24,000
0.567
0.421
0.312
0.269
0.228
0.186
$26,000
0.614
0.456
0.338
0.292
0.247
0.202

 

Interest Rate at 6%
Quota Price
 Length of Loan in Years
$/kg
5
7 10 12 15 20
$20,000
0.496
0.375
0.285
0.250
0.216
0.184
$22,000
0.545
0.412
0.313
0.275
0.238
0.202
$24,000
0.595
0.450
0.342
0.300
0.260
0.220
$26,000
0.644
0.487
0.370
0.325
0.281
0.239

 

Interest Rate at 8%
Quota Price
 Length of Loan in Years
$/kg
5
7 10 12 15 20
$20,000
0.520
0.400
0.311
0.278
0.245
0.214
$22,000
0.572
0.440
0.342
0.305
0.270
0.236
$24,000
0.624
0.480
0.373
0.333
0.294
0.257
$26,000
0.676
0.520
0.404
0.361
0.319
0.279

 

Interest Rate a 10%
Quota Price
 Length of Loan in Years
$/kg
5
7 10 12 15 20
$20,000
0.545
0.426
0.339
0.306
0.276
0.247
$22,000
0.599
0.468
0.373
0.337
0.303
0.272
$24,000
0.654
0.511
0.407
0.368
0.331
0.297
$26,000
0.708
0.553
0.441
0.398
0.358
0.322

 

Based on 3.9% fat test = 9,359 litres milk.
No income tax adjustments or cost of production included. Assumes 100% fill of quota, no allowance for production incentive sleeves.

Example: A loan to buy quota at $24,000 at 6% over 10 years costs 34.2 cents per litre.

Different fat tests will affect the number litres of milk that quota covers and therefore the cost of loan per litre.

 

 

For more information:
Toll Free: 1-877-424-1300
Local: (519) 826-4047
E-mail: ag.info.omafra@ontario.ca