The final figures published on Friday 7 April reveal that 48,288 European farmers reduced their total milk production by 860,907 tonnes through the EU’s €150 million scheme (see EUROPE 11747).
The scheme to reduce milk production was one of the flagship measures from the European Commission to address the milk crisis. The unused portion of the €150 million will be made available to the common agricultural policy (CAP) and used for market measures that might prove necessary.
The Commission was able to update the information after receiving final figures from the member states on the second reduction period (November 2016 to January 2017).
In total, more than €1 billion has been mobilised by the Commission since September 2015 in market measures such as public intervention and private storage for dairy products and financial packages for the member states.
This is the first time the EU has put in place a voluntary scheme for reducing milk production. It has proved a clear success, the Commission says. Average farm gate milk prices have increased by 31% since last summer, up to 33.7 cent/kg in February 2017.
Caution on future. In its recent report following its meeting on 28 March, the EU Milk Market Observatory is cautious about the future. “Global market balance appears uncertain with production picking up in the US and New Zealand, and a rather modest demand expansion”, it states. Prices for EU dairy products have generally been falling since the start of the year but they are still much higher than one year ago (+76% for wheypowder, + 57% for butter, +41% for WMP, +11% for SMP and +30/40% for cheeses).
Contraction in milk deliveries continued in January 2017 by 2.4% and provisional figures for February confirm the trend, with large decreases in the main producing member states. For the remainder of 2017, “in view of the herd situation and other market factors, a 0.6% increase in EU milk collection can be expected with most of it taking place in the second half of the year”.
Permanent crisis management mechanism. On 30 March, the European Milk Board (EMB) hailed the effectiveness of the voluntary scheme to reduce milk production. It notes, however, that, “prices might have risen, but the recovery can only be short-lived so long as a comprehensive crisis mechanism is not put in place". It calls for voluntary reduction to play an important role in the sector's future as a permanent instrument and in conjunction with a cap on volume. Via Campesina is more pessimistic. It says that two years after the end of milk quotas, on 31 March 2015, there is no glimmer of hope on the horizon. It calls for a public instrument to regulate production in order to limit the development of large farms and check the destruction of the European production model. (Original version in French by Lionel Changeur)