There has been a significant increase in the last three weeks of European countries selling milk powder into public intervention, according to latest figures from the Milk Market Observatory (MMO).

Back in early July 2015, Lithuania became the first country to use public intervention following the latest downturn in dairy prices.

Over the next few months, it was joined by a host of EU Member States including Ireland in using the instrument.

The first week of September saw the use of the measure peak with over 3,000t of skimmed milk powder (SMP) sold into intervention in that week.

Through late September and October, the use of pubic intervention by Member States had been declining significantly cumulating in no product being sold under the measure by early November.

The fall in the use of intervention at the time coincided with somewhat of a pick up in dairy markets.

However, more recently the use of public intervention for skimmed milk powder by Member States has ramped up again.

The first week of this month (January 2016) saw the highest amount of product offered to public intervention in the last 12 months (3700t). Offer quantities were also high in the latter weeks of December 2015 with in excess of 3000t a week also offered.

The European Commission had signalled in recent months that its assessment of EU stock levels based on a residual approach (production + imports – consumption – exports) confirmed important stocks for SMP, above normal needs and with no reduction in the July-September period against the normal seasonal pattern.

According to the MMO, these stocks might weigh heavily on the market at the beginning of 2016 when EU milk production starts to rally for peak production.