The Irish dairy industry is set to formally request the European Commission to 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 during times of exceptionally challenging market prices for meat and dairy products when seasonal supply spikes can outstrip demand. The scheme allows co-ops or processors 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 diary processors could be used to help underpin dairy market prices in Europe over the coming months as the coronavirus emergency escalates but also as 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 European Commission to reopen the private storage scheme with the backing of both of these partners.

Soaring container fees

Meanwhile, DII says it is also in discussion with European Commissioner for Trade Phil Hogan and his team at DG Trade in a bid to reduce the soaring cost of shipping containers in Europe. Since the outbreak of the coronavirus in China, shipping containers have become extremely scarce in Europe due to cancelled sailings and thousands of cargo ships still being stuck at port in Asia.

The price of a shipping container has skyrocketed as much as 60% over recent weeks due to the shortage, which is adding to pressure in the Irish food industry. Again, with the backing of the European Dairy Association and the Irish Government, DII says it hopes to persuade the European Commission to directly intervene with transport and logistics companies to lower container costs.