Intervention is now a serious option for Irish dairy processors, according to ICOS Dairy Policy Executive, TJ Flanagan.
He says that while butter at the moment is selling well above intervention levels, Skimmed Milk Powder is ‘there or there abouts’ intervention prices.
However, Flanagan stressed that it’s a commercial decision whether to sell product into intervention or not.
“Intervention is a valid home for product now that prices are so low, but it’s a commercial call.
“You won’t benefit from any upturn in the future – once product is sold into intervention that’s it, it’s gone,” he cautioned.
The last time Ireland sold any product into intervention was in 2009. Flanagan said at that time intervention opened in ‘early’ 2009 and the thresholds were filled very quickly.
However, he said the market turned and picked up towards the end of the year, around September, and product started to come back out of intervention.
The the current intervention prices include €221.75/100kg for butter and €169.8/100kg for skimmed milk powder (SMP) these prices equate to 21c/L in terms of Irish milk prices.
Under the intervention scheme, operators in the dairy sector can sell butter and SMP to public authorities at the above mentioned fixed prices up to a limit of 50,000t for butter and 109,000t for SMP from March to September each year.
In case those ceilings are met, purchases continue through a tender system.
Member State’ authorities notify to the Commission on a weekly basis the quantities for which they have received offers for sale.