The EU Agriculture Council’s decision to temporarily remove fixed-price intervention buying-in for skimmed milk powder (SMP) this year was described as intending to “stabilise dairy markets in 2018 and to avoid disruptions” by the Bulgarian Council President, Rumen Porodzanov.
He said farmers would legitimately expect that the EU Presidency, Commission and Council would see to it that this would be the outcome of the changes, and that they would implement the proposals put forward by the French to dispose with minimum disturbances of the current SMP stock on hand, including through nutrition for the deprived within the EU.
Meanwhile, IFA national dairy chairman Tom Phelan has urged co-ops to resist the temptation to use this week’s EU decisions to talk down price. “Co-ops have been running farmer-information meetings, and, it is important they would convey to farmers their plans to maximise market opportunity. They must recognise that, while EU supplies are rising and stocks have been a depressing factor, global demand is strong and continuing to rise,” he said.
“Oil prices have been rising and are improving the purchasing power of many of our African and Middle Eastern customers. China had ended 2017 with dairy imports up 37 per cent in value on the previous year. South Korean demand, which had lifted 20 per cent in 2017, is being boosted by the influx of visitors to the Olympic Games, and Southeast Asia generally continues to see import increases of over 7 per cent.
“We have seen two significant increases in the Global Dairy Trade (GDT) auction index this year so far, with the next auction expected to also see reduced volumes being offered,” he added.
“It is clear that 2018 will be more challenging than 2017. However, farmers will legitimately expect their co-ops to tell them how they will optimise market opportunities despite the challenges, to return the highest possible milk prices in 2018.”