Over 280,000t of milk powder sold into intervention in 2016

Over 281,000t of milk powder has been sold into public ownership since the start of the year, according to latest figures from the European Milk Market Observatory.

This equates to approximately 17.5% of total EU SMP production in 2015, and approximately 2% of the EU’s annual milk production.

Last may, the levels of Milk powder in Intervention reached the European Commissions ceiling of 218,000t. Soon afterward the Commissioner announced he would increase the ceiling to 350,000t

A tender procedure was automatically triggered on May 24 when volumes of SMP entering public intervention.

The ceiling at the fixed price had been doubled earlier in the year from 109,000t to 218,000t.

The tender procedure was also activated in mid-April when volumes exceeded 109,000t.

At the rate powder is being sold into intervention it will break the 300,000t mark in June. To put that into context 300,000t is as much as 75% of New Zealand’s annual production.

intervention graph 2

Key EU Member States and milk production nations Germany, France and Poland have agreed a common position on how to solve the ongoing difficulties in the dairy market.

The three nations, in particular, agreed on the need to establish a European financial incentive to encourage voluntary reduction of milk production.

To date, the European Commission has been adamant that EU funding would not be available to incentivise farmers to reduce production and Commissioner Phil Hogan recently said that he has exhausted all the tools available to him.

However, the move by the three nations yesterday has brought back into focus the possibility that the EU may activate the CAP Crisis Reserve which would reduce the EU payments of all farmers.