Brussels, 27/02/2015 (Agence Europe) - Farm gate milk prices experienced their strongest decrease in December 2014 (-3.8%), according to the report published on Friday 27 February, following this week's board meeting of the Milk Market Observatory.
The report shows that the trend appears to be stabilising (expected -0.8% in January 2015) and the floor price is believed to have been reached in some member states. The concomitance of low farm gate milk prices and a heavy super-levy to pay on production surpluses (fines producers must pay if they overrun their milk quotas) has led to cash flow difficulties for farmers, the report acknowledges. It goes on to state that the future remains uncertain, notably with regard to the production reaction after 31 March 2015 (when milk quotas expire). The recent slowdown is considered to be more related to the looming super-levy, and only partly to lower milk prices. In countries such as France, milk production variations are framed by existing contracts.
Readers may recall that on 22 February, the Commissioner for Agriculture, Phil Hogan, announced that he had made a proposal to allow the member states to authorise milk producers obliged to pay the super-levy due to having overrun their milk quota for the 2014/2015 year to pay the fine in up to three interest-free instalments. (Lionel Changeur)