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The dairy industry must heed the warning signals from the current market situation, European Commissioner for Agriculture Phil Hogan told a meeting of key industry stakeholders on Thursday 12 April.
Hogan made the comments in relation to the issue of some 370,000t of Skimmed Milk Powder (SMP) which was bought by the Commission and placed in public intervention.
Not good enough to continue producing any product for a non-existent market
The Commission has been having difficulty attracting reasonable offers for the aging stock, with just 4,000t sold in March for €1,050/t, which is significantly lower than the intervention price of €1,698.
Hogan said it was “not good enough to continue producing any product for a non-existent market and then confidently expect that the taxpayer, in this case through the Commission, will bail them out".
EU intervention stock buying of SMP has ceased in a bid to stabilise the dairy markets in 2018.
Selling SMP
Currently, the SMP held in intervention can only be sold through a tendering process.
However, alternative methods for a swift disposal of the SMP in intervention were called for by the main German farm union, Deutscher Bauernverband.
The German farm union cited two proposals tabled by the French government to sell the stock without destabilising the current milk powder market.
The suggestions included:
But Commissioner Hogan dismissed the ideas, saying: “The rules of the game should not be changed in the middle of the match.”
He said the current tendering process must be upheld and called for more “vigorous participation of private operators in the tenders, with meaningful bids in line with market reality”.
SHARING OPTIONS: