Decision to release SMP back onto the market ‘extremely premature’

The decision by the European Commission to release 22,500t of skimmed milk powder (SMP) onto the market is extremely premature, according to ICMSA Dairy Chairperson, Gerald Quain.

Quain also said that it has the capability of ‘nipping in the bud’ any prospects of recovery in the dairy market.

“Irish dairy farmers are still producing their product below the cost of production and stock being released at this time could very well damage the market into early 2017.

“We are at a critical juncture in the dairy market recovery currently underway and farmers are entitled to expect the Commission – which did so little while the price collapsed through 2015 and 2016 – to nurture that recovery and not act so hastily in terms of selling this volume out of intervention and back onto the markets.

“The very least that dairy farmers were entitled to – in light of the very lamentable record of the Commission in addressing the milk price collapse – was that great care would be taken not to jeopardise the market as it recovers through a too-early selling of stock in intervention,” he said,

Quain said that he predicts that the Minister for Agriculture, Michael Creed, will be answering angry questions on this at Monday’s AGM in Limerick.

On Friday last, the European Commission announced that a tender procedure to release the first amounts (22,500t) of SMP out of public intervention stocks would open on Friday.

The move came following a vote by Member States on the Commission’s proposal to release some of the stocks.

According to the Commission, the move reflects the encouraging signs of recovery being seen on the European milk market, with an increase of about 10% of the average price paid to producers in the last three months.

Following a steady slow down, figures from the EU Milk Market Observatory (MMO) show that no more quantities of SMP have been put into public intervention since September 2016, even though this market measure remains open.