Brussels, 16/07/2012 (Agence Europe) - On Monday 16 July, Poland and Lithuania called on the European Commission to adopt market measures to tackle the worsening situation of the market for milk and dairy products. Spain, Belgium, Portugal, Hungary, Slovenia and Latvia supported the Polish and Lithuanian request. Germany and Luxembourg acknowledged that the sector was going through a rough time, but felt that it was better to wait for the entry into force of the “dairy package” (in October) before acting.
After a largely positive evolution of prices for milk paid to producers throughout 2011, “the tendency has reversed in recent months and milk prices have seen a downturn”, admitted Agriculture Commissioner Dacian Ciolos. According to his staff, this drop is seasonal and can be explained by the sharp increase in milk production in the largest producer regions (EU and third countries such as New Zealand and Australia). The latest average available for the EU of milk prices paid to the farm was 31.6 cents/kg for the month of May (or 30% more than in May 2009, in the teeth of the crisis).
In the member states which notify prices below the Community average, the dairy sector is faced with specific situations: a majority share for products with low added value, major pressure from supermarkets and retail, dependence on certain products and a more volatile global market, dairy structure of low amplitude, farm debt, etc. “This type of weaknesses cannot be resolved with timely market intervention measures”, stated the Commission. Ciolos reiterated the existence of the milk package, part of which concerns strengthening the position of milk producers within the food chain. As regards margins at dairy farm level, for the first quarter of 2012, margins were at levels comparable to the same period in 2011. Since May, prices for butter and skimmed milk powder have started to rise. As regards farms, the competitiveness of the Union's products on the global market is largely favourable, particularly for skimmed milk powder, exports of which reached record levels in 2010 and 2011. According to the figures currently available, results will be even better in 2012 (+22% over the first four months of the year). The situation is different for fats, but the drop in prices has allowed EU butter to regain a certain competitiveness on the global market and the first signs of a recovery of exports without refunds can be seen, Ciolos' services explained.
As regards the safety net instruments, only private storage for butter has been used by operators, out of the three tools available. The reactivation of export refunds does not appear justified in light of the current market situation, the Commission added. It has pledged to follow developments on this market very closely and continuously. (LC/transl.fl)