Volumes of milk powder in intervention hits EU limits
The volumes of milk powder offered to intervention since the start of the year have reached the EU’s limit of 109,000t.
Skimmed Milk Powder (SMP) offers into intervention will be subject to a tendering process from April 1, as the volume limit for product entering at a fixed price has now been reached.
Last month, the EU Commission announced it would double the SMP volume ceiling for fixed pricing to 218k tonnes, but so far it has not formally adopted this increased limit.
Therefore, SMP entering intervention from April 1 may receive a lower price than the fixed price of €1,698/tonne.
This could put further downward pressure on prices, as this fixed “floor” in the market potentially gives way. The deadline for submission for the first round of tenders is April 19.
Do date in 2015 Ireland has offered just over 7,000t of SMP to intervention which accounts for 6.5% of the total volume.
EU milk production increased 5.6% in January 2016 compared to the corresponding period in 2015, the latest figures from the Milk Market Observatory (MMO) show.
Ireland, Luxembourg and Belgium posted the strongest increases in milk production for January, with Irish milk production up 19.5%.
Skimmed milk powder (SMP) production in January 2016 is up 12.7% on the corresponding month last year. This figure comes as EU Member States offered 93,539t of SMP to public intervention so far this year.
Butter production in the EU was up 5.8% on January last year, while cheese production increased by 1.3%.
Last week average EU dairy product prices showed slight uplifts for the first time in weeks for butter, cheddar cheese and whey powder, and stable SMP prices, according to IFA National Dairy Committee Chairman Sean O’Leary.
He cites EU Milk Market Observatory figures detailing latest spot quotes from Germany (Kempten), France (AgriMer, ATLA) for SMP which are showing signs of stability, while Dutch feed quotes are slightly up and food grade powder also stable to slightly easier.