EU extends storage aid for dairy products as markets remain poor

The private storage aid for butter and skimmed milk powder will be extended until September 30, 2016, following the approval by Member States of a proposal made by the European Commission.

The Commission put in place private storage aid schemes for butter and skimmed milk powder in summer 2014 to support EU producers facing the effects of the Russian import ban.

Following continued worldwide market imbalance, private storage aid schemes have already been extended three times since its introduction to ensure continuity of support.

Speaking at an event on the milk sector in the European Parliament, Commissioner Hogan said the Commission wants farmers and dairy operators of all sizes in the EU to get a fair price for their hard work.

“We want them to continue delivering a world-class product. We want to provide them with a greater degree of security and sustainability in their livelihood.

“The Commission will take all necessary steps to safeguard the livelihoods of our dairy farmers, and, indeed, the sustainability of our agri-food sector as a whole. I will use all the measures I possess to stabilise the market,” he said.

Over 50,000t of Skimmed Milk Powder (SMP) and 141,000t of butter was put into the EU’s Private Storage Aid scheme in 2015. Of this Ireland accounted for 6,000t of the SMP and 19,000t of the butter.

Half Of European Milk Production Growth In Intervention Or PSA

High EU milk production has resulted in an increase, since April, in the production of SMP by 8.7% and butter of 4.8%, according to Flanagan.

Furthermore, he highlights, that between the end of June 2015 and Jan 4, 2016, 46,639 tonnes of SMP were offered into intervention. He also said this should be considered alongside 71,489 tonnes of SMP in either the 210 day or 365 day private Storage Aid Schemes.

“This total of around 118,000t of powder is equivalent to around 1.3 billion litres of milk (skim), or around 0.85% of European production.

“With Europe running at around 2% up on production, it is apparent that nearly half the growth is being put into either Intervention or PSA.

Flanagan said it is clear that the market will remain weak until either consumption grows in response to low prices; difficult, given low oil prices and poorer developing countries, or supply growth eases significantly.

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