EU to relook at intervention after record volumes of powder offered

The European Commission will look at skim milk powder intervention ceilings in the coming days, after 22,000t of skim milk powder was offered into intervention in the past week.

Tom Tynan, a senior member of EU Agriculture Commissioner Phil Hogan’s cabinet, told the Dairy Industry Newsletter (DIN) conference in London this week that the 22,000t of skim milk powder was a record.

However, he indicated that an increase in intervention prices would not be on the cards.

Tynan said that the European Commission would continue to support the dairy market, in light of the fact the intervention ceiling may be reached within two weeks.

“We are about two weeks from the threshold being breached. In the next couple of days we will be having a serious look at it. This is a record. I’ve never seen a number like it. We will continue to support when it’s full.”

However, he said that higher support prices would only make the problem worse and give the wrong signal in the market.

“From a budget perspective, we have to be very conscious that funds are limited. We have to ensure that we use the funds in the best possible way.” Migration supports must be addressed financially, he said and there will be pressure on the CAP budget. “After 2020, we have to sing for our supper and defend it.”

He said the current dairy situation is a serious crisis, with record levels of milk being produced in Member States across the EU.

“From a Commission perspective, this Commission is as concerned about the issues as you are, from a farmer and industry perspective. We have used every possible instrument available to us in the common market.”

Private Storage Aids and intervention measures were improved and the EU has allocated €1bn in agri supports since the Russian ban was put in place, he said.

“The Private Storage Aids and intervention measures have halted a further decline in milk prices.”

However, he said that of the €500m aid package which was allocated in late 2015, some €200m of it remains unspent.

The Netherlands, he said, is the only Member State that has looked at it structurally, but he added that it is up to each Member State to decide what is the best support to decide, not the Commission to direct.

Future supports, he said, would also entail a greater spend on promotion of dairy products in third countries. “Promotion and third country markets are key as the EU population is flat.”

Europe, he said, must not only be offensive in its campaign to open new markets for European food produce, it must also be defensive when it comes to sensitive sectors.

“The EU is offensive on the dairy side but we have sensitive sectors. So we have to defend as well as being offensive.”