More countries sell dairy product into intervention
Poland and Belgium last week moved to follow Lithuania’s lead in selling dairy product into intervention.
It now means that there is currently just under 1,200t of skimmed milk powder (SMP) in public intervention with Belgium offering 250t and Poland 320t last week.
Lithuania which was the first country to use the measure since 2009 offered a further 320t of (SMP) last week taking their total amount of product in intervention to 606t.
According to latest data from the European Commission quotes for EU Skimmed Milk Powder (SMP) have faired poorly in the last two weeks down 3.6% to $1,903/t. When compared to quotes of $4,290/t offered 12 months ago they have fallen by more than half.
Following the growing concern about the economic situation in the dairy sectors in certain Member States of the EU, the Luxembourg Presidency decided to convene an extraordinary Agriculture Council meeting on Monday, September 7, 2015, in Brussels.
At meeting of European Agriculture Ministers last week, the Minister for Agriculture Simon Coveney asked EU Agriculture Commissioner Phil Hogan to give serious consideration to an intervention price increase.
ICMSA President John Comer has said the EU must immediately increase the intervention price to 28c/L and send a clear signal to the market that it will not accept a situation where EU farmers have to produce milk below the cost of production.
The purchasers of dairy products can pay more as seen in 2014 and the EU must intervene to stop the current downward movement in dairy product prices.
How intervention works
The the current intervention prices include €221.75/100kg for butter and €169.8/100kg for skimmed milk powder (SMP) these prices equate to 21c/L in terms of Irish milk prices.
The last intervention purchases were made in 2009.
Under the intervention scheme, operators in the dairy sector can sell butter and SMP to public authorities at the above mentioned fixed prices up to a limit of 50,000t for butter and 109,000t for SMP from March to September each year.
In case those ceilings are met, purchases continue through a tender system.
Member State’ authorities notify to the Commission on a weekly basis the quantities for which they have received offers for sale.
As an exceptional measure, the Commission can decide that purchases can also occur outside the standard intervention period.
Such an exceptional measure has been taken following the Russian ban and is still in force. So far, no offers have been received.