Coveney to raise dairy sector issues in Brussels

Issues surrounding the weakness of the dairy market at present is to be raised at the the next meeting of EU Agriculture Ministers by Minister for Agriculture Simon Coveney.

Minister Coveney said this week that he can confirm that, at the next meeting of the Council of EU Agriculture Ministers, he will impress on the Commissioner the need for adequate market support measures to address the negative effects of the Russian ban on agri-food products from the EU.

He said that he has already signed a common note from Belgium, Denmark, Ireland, France, Hungary and Romania, which is supported by Austria and Estonia, calling on the Commission to introduce a scheme of aid for private storage of pigmeat.

As to the dairy sector, he said the continuing weakness in the global dairy market is having a severe impact on dairy farmers in Ireland and throughout the EU.

He noted that prices have fallen from historically high levels in 2013 to exceptionally low levels at present, and further reductions are anticipated.

Minister Coveney said this weakness in prices has been exacerbated by the Russian import ban.

“In these circumstances it is important that the European Commission uses the measures available to it to assist the situation. Some private storage aid has already been provided.

“I will be raising the dairy sector at next week’s Council of Ministers and will be calling on the Commission to take whatever action is necessary to support the market in a way that is both timely and effective during the period of instability in prices,” he said.

The Minister also highlighted this week that after two years of extremely high prices, the combination of strong production in key dairy producing countries, including the USA, New Zealand, Australia and the European Union, driven by good weather, increased cow numbers in the US and strong cereal harvests, has seen the emergence of a surplus in dairy products on international markets coming into 2015.

Furthermore, he added that with Russia and China accounting for 27% of the traded world market in the dairy sector, the effect of surplus stocks in the Chinese market along with the displacement effect of the Russian ban can be seen as critical factors in setting the context for price evolution in the sector.

He said the anticipated decline in 2015 largely reflects the impact of the aforementioned developments on global dairy markets.

Coveney noted that Teagasc expects that average Irish milk prices in 2015 will fall to 27c/L, a reduction of over 10 cent per litre on the average for 2014.

However, he stressed that it should be noted that this follows several years of very good incomes on dairy farms and that Teagasc are clear that these negative effects are expected to be temporary in nature.

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