Farm Ireland
Independent.ie

Tuesday 24 October 2017

Hogan hits out at people using intervention stocks to 'talk down milk prices'

Latest tenders for EU stocks of milk powder rejected again

European Agriculture Commissioner Phil Hogan.
European Agriculture Commissioner Phil Hogan.
Ciaran Moran

Ciaran Moran

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.

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Weak SMP returns have a knock on effect for other products such as Casein and FFMP, it says.

Online Editors