0.5% of intervention SMP remaining – with Irish stock cleared

A total of 584t of skimmed milk powder (SMP) was sold out of intervention this morning (Thursday, February 7) in Europe – meaning that just 0.5% of product is left in store.

According to Dairy Industry Ireland (DII), the product was shifted at a minimum price of €1,622/t.

This again was a jump from the last tender minimum price of €1,585/t, and reflective of the recovering global dairy protein market.

Sources in Brussels say the higher price and refusal to sell all remaining stocks is a signal to the market of the recovery of powder prices.

Around half a percent of peak intervention stock remains, with the vast amount of that now in Spain. Irish SMP intervention stock has been cleared.

Conor Mulvihill, director of Dairy Industry Ireland, very much welcomed the clearance of the SMP intervention stock by the EU in an orderly manner.

He said that the almost 400,000t of stock had “served as an albatross around the neck of the global dairy protein market”.

“The clearance of this stock hopefully will lead to a sensible rebalancing of dairy protein and fat markets that will deliver stability in pricing for farmers and processors,” the director added.

Mulvihill did caution that, despite the optimism around the recovery of SMP pricing, that current intervention disposal prices only equate to a milk equivalent price of under 20c/L.

This shows that the market has some way to go in terms of delivering proper returns for Irish farmers and industry, the director said.