Ireland to ask EU to open private storage aid to support milk prices

The Irish dairy industry is set to formally request the European Commission reopen its private storage aid (PSA) scheme for dairy products like skimmed milk powder (SMP), butter and cheese.

Private storage aid is a price support tool used by the European Commission in times of exceptionally challenging market prices for meat and dairy products.

The scheme allows co-ops to store long-life dairy products such as butter, cheese and milk powder in warehouses for a stipulated period, during which time they receive a fixed price support from the European Commission.

The Irish dairy industry says reopening private storage aid to European dairy processors could be used to help support milk prices over the coming months as the coronavirus emergency escalates and Europe hits peak milk production in April, May and June.

The Irish Farmers Journal understands that Dairy Industry Ireland (DII) is in close contact with the European Dairy Association and the Irish government and hopes to formally request the reopening of the private storage scheme with the backing of both of these partners.

DII says it is also in discussion with European Commissioner for Trade Phil Hogan, in a bid to reduce the soaring cost of shipping containers in Europe.

Container fees have skyrocketed 60% over recent weeks and are adding to pressure in the Irish food industry.

Dairy markets

Milk powder prices fell sharply this week. SMP prices plunged €320/t, while WMP prices dropped more than €700/t in a single week. These are big price falls in such a short space of time. On a positive note, butter and cheddar prices have held firm this week?, thanks to demand from supermarkets.