Hogan pushes for intervention changes

The Commissioner was speaking in Poland this week.

For the second time in two weeks, the Commissioner was downbeat on the outlook for the vast quantity of SMP still in intervention.

For the last week of September alone, more than 11,500t have been offered to public intervention

Some 380,000t of the product remains in sheds across the continent with market for it.

Two weeks ago, Commissioner Hogan alluded to the possibility of revamping the intervention process which essentially acts as a floor in the market.

SMP is sold into intervention at €1,696/t but the current market is closer to €1,400/t at present.

He said the 380,000t of SMP currently in intervention had “an undeniable market stabilisation impact”.

However, he said too much SMP has been sold into intervention when the market did not justify it.

“In recent weeks, we have seen a rush to sell SMP into intervention, even though market conditions didn’t justify it.

“For the last week of September alone, more than 11,500t have been offered to public intervention.

“If nothing is done, from March next year, we will be obliged to buy SMP at a fixed price within the ceiling of 109,000t.”

Avoiding repetition

The intervention process remains closed from the end of September until March next year.

Hogan said the Commission and agriculture ministers across Europe need to find a way of making changes to intervention to avoid another glut of SMP entering it next year.

“I am of the view that buying-in should only happen when duly justified by market fundamentals. There are, therefore, a number of possibilities that ought to be considered in order to ensure that buying-in operates on a rational basis.

“One option would be to start the next campaign (from 1 March) with buying in through a tender procedure. That means we decide together what volumes should be accepted and at what price.

“To make that possible, the ceiling for buying-in at fixed price (currently 109,000t) needs to be set at zero in 2018. This is a Council competence and the idea is currently being examined with agricultural ministers.”

Read more

Major milk producers upping supply again

Dairy markets: GDT falls again as sentiment turns negative

2019 start for new infant formula plant