Commission sells 41,958t of SMP out of intervention this week
The European Commission has sold 41,958t of Skimmed Milk Powder (SMP) out of intervention this week for €100/t more than in April.
This, according to Irish Farmers’ Association (IFA) National Dairy chairman Tom Phelan, shows that there could be no doubt that dairy markets are now recovering.
“The EU Commission this week sold 41,958t of SMP out of intervention for a minimum price of €1,150/t, €100/t higher than last month, showing clearly improved buyers’ sentiment,” the chairman pointed out.
“This is a total reduction of over 76,000t in the intervention stock overhang,” Phelan said.
International quotes for dairy commodities have been firming for weeks due to slower milk growth in the EU and lower volumes from New Zealand.
Co-ops must now stop talking down milk prices, and start leveraging those higher returns for suppliers, Phelan said.
“Buyers’ understanding that the days of cheap dairy products are over is also in evidence in rising international prices, which in the last week returned between 31c/L (EU MMO) and 34c/L (average of European spots) before VAT for an Irish product mix, after deduction of a nominal 5c/L processing cost.
Co-ops don’t just trade in standard SMP and butter however, with higher-value fat-filled powders, whey products and infant formula ingredients increasingly important in their product mixes.
“It is now time for co-ops to stop talking down milk prices, and to start leveraging the improved returns for the benefit of farmers,” Phelan concluded.