Latest tenders for EU stocks of milk powder rejected again
All tenders for Europe’s giant stockpile of skimmed milk powder were again rejected by the European Commission.
The latest tender saw bids as low as €1,380/t for the product. A total of 6,554t of powder has been added to intervention stocks so far in 2017, bringing the overall total held by the Commission to over 356,000t.
Speaking to Agriculture MEPs last week, Agriculture and Rural Development Commissioner Phil Hogan said skimmed milk powder remains an issue and added that it is being used by some people in the trade in order to “talk down prices in the market place”.
“We are working on proposals and we have learned from the 2009 experience when we had quotas and we had 250,000t in storage at that point even with quotas.
“We have to manage this well so that we don’t drive down the price to the farmer. We have rejected all tenders on the market place that have been offered.
“We are working with third countries and various schemes are being evaluated to see what we can do to manage this particular issue over the next year or so that will not damage the price to the farmer,” Hogan said.
ICOS recently highlighted that the value of SMP compared to butter has fallen from 70pc over a five-year average to 45pc.
It says the overhang of 350,000t from 2015-16 represents approximately 17pc of annual SMP trade and is 1.6pc of annual EU milk production.
Weak SMP returns have a knock on effect for other products such as Casein and FFMP, it says.
The steady recovery in milk prices since the middle of last year has been welcome news for Irish dairy farmers. According to the EU Milk Market Observatory, Irish milk prices at real fat and protein content paid to milk producers increased by 30pc in April 2017 compared to April 2016.