European Commissioner for Agriculture and Rural Development Janusz Wojciechowski has been called on to immediately activate market management tools to “signal a boost of support” for the dairy market and prevent a drop-off in milk price.
Making the calls, the Irish Cooperative Organisation Society (ICOS) and other European cooperative organisations seek in particular the Aids to Private Storage (APS) facility for butter, skimmed milk powder and cheese.
Alison Graham, European affairs executive of ICOS, underlined the need for these measures, saying:
We see that dairy prices across the EU are falling. We know that, as tough as things are now, they will only get worse if no action is taken.
Graham added that ICOS is also seeking other “vital” temporary derogations from EU legislation with the aim of providing increased flexibility to support the logistics network and transportation workers.
“It is vital that we keep the chain moving, maintaining the delivery of critical inputs as well as the continued supply of exports across the EU and globally.”
The ICOS executive explained that lessons are being learned from the challenges facing cooperatives in Italy, Spain and France for “managing operations within a lockdown and facilitating the continued operation of logistics”.
New challenges are surfacing for cooperatives on a daily basis as they try to maintain the collection, processing and distribution of milk and dairy products while maintaining the safety of farmers and staff and managing the surge of peak production.
ICOS stressed the impact of the essential shut-down of the food service industry across Europe and the US on Irish dairy, noting that Irish co-ops produce “a significant number of products” for this industry – which is in an indefinite limbo.
“There is also a significant concern that there will be an economic downturn in our key markets, the US and China – but also in Africa and the Middle East,” Graham added.
Adding to concerns voiced by Dairy Industry Ireland (DII) in recent weeks over shipping, the executive said: “The cost of exporting too has increased considerably, due to both a shortage of freight containers and logistical staff in the transport network.
In Ireland, logistics companies were running at about 50-80% of normal capacity last week, with some workers ill or needing to self-isolate, and others not willing to travel abroad or even within Ireland, for fear of exposure.
It was added that Irish ports are also “operating at considerably reduced capacity, with only one ship being unloaded at a time”.
“With tighter restrictions on movement announced by the Irish Government on Friday evening, these operation levels are anticipated to fall further still over the coming week.
This is slowing down the full chain, and cooperatives are struggling to get trucks and haulier companies confirmed for operations.
Welcoming the EU’s move on export credit insurance, ICOS said this will help to reduce risk for Irish exporters.
Irish dairy cooperatives export over 90% of their products, and therefore are significantly exposed to these risks, the organisation noted.