Milk prices won't recover in 2016 warn experts
Prospect of global rally recedes and Commissioner Hogan rules out EU intervention saying only the markets can provide a solution
Published 02/02/2016 | 02:30
The outlook for milk prices continues to worsen, with one leading international analyst admitting that "the light at the end of the tunnel has dimmed" in recent weeks.
Rabobank's Kevin Bellamy said that recovery on milk markets was receding, despite a 7pc fall in output in New Zealand, and increased consumption in China on the back of cheaper dairy prices. Domestic Chinese production has also slackened against rock-bottom prices from competing imports.
European intervention levels equivalent to 21c/l are now the floor in international markets.
Despite the worsening situation, the EU Agriculture Commissioner, Phil Hogan, has ruled out intervening in the market to prop up prices.
Mr Hogan said the problems were market driven and could only be fixed by the market itself, rather than regulatory or legislative actions.
However, he did admit that the relationship between farmers and processors and retailers may need to be the subject of legislative intervention.
His comments come in the wake of a damning British report that identified serious breaches by Tesco in the UK of the retailers' voluntary code.