Ireland offers no SMP to intervention after ceiling increases

Ireland offered no skimmed milk powder (SMP) into the public intervention system for the week ending July 1, the latest figures from the European Milk Market Observatory (MMO) show.

There was a drop off in the number of countries offering SMP to the measure last week, with Poland and the Netherlands also not offering any product.

In total last week some 1,861t of SMP was offered to the measure, bringing the total amount of product in the measure to 219,861t.

The fall in product comes as new rules came into force last week which increased the intervention ceiling from 218,000t to 350,000t.

The increase in the intervention ceiling comes at a moment when the volumes of SMP bought up so far this year have already reached 298,386t, of which 218,000t via fixed-price intervention and 78,525t via intervention tenders, the Commission has said.

Last month the levels of Skimmed Milk Powder in the measure breached the EU’s ceiling of 218,000t since then product has been sold into the measure via a tendering process.

SMP offered into intervention in the last round of tendering was accepted at the fixed intervention price of €1,698/t.

Just over 15k tonnes were bought in for the period ending June 21, which is less than half the volume of the previous tender.

Dairy prices remain on course to rise in the fist half of 2017 – Rabobank

Meanwhile, the latest Rabobank Dairy Quarterly report has found that dairy prices remain on course to increase in the first half of 2017.

While Rabobank still forecasts prices to rise in 2017, Kevin Bellamy Dairy Analyst with Rabobank has said that these risk being dampened by continuing weak demand due to low oil prices, trade bans and lack of affordability in emerging markets.

“As a result, the light at the end of the tunnel remains undimmed,” he said.

According to the report, global deliveries of milk have started to fall, while dairy markets are showing only modest demand growth.

Despite upward movement in prices at the end of the second quarter, it expects growing inventories will continue to overhang the market as the world works its way through the current glut.

In the second quarter, the world’s farmers started to react to protracted lower farmgate prices by slowing growth in production – as anticipated, production will start to fall in response to low farmgate prices, leading to sharp reductions in export surpluses, the report found.