Growing hopes dairy markets bottomed out

There is growing confidence that global and European dairy markets have bottomed out. The latest monthly figures from the European Commission’s Milk Market Observatory, which monitors markets, showed a rise across the board for European dairy commodities.

This was strongest for butter, with prices up by more than 6%.

Prices for other commodities were up by around 3%.

The MMO reported a big surge in butter exports in the first six months of the year.

It said there were also signs that reduced global milk production was beginning to feed through to prices.

This is the most positive MMO report for some months, and it may prompt the Commission to question basing its aid plan, due to be agreed in the autumn, on a cut in milk production.

Global prices, measured by the Fonterra Global Dairy Trade auction are now at their highest level since October last year, with prices for whole-milk powder leading the market revival.

MERCOSUR CLAIM

The European Parliament president, Martin Schulz, has claimed that if a trade deal is concluded with the Mercosur countries of South America the UK will be excluded because of the Brexit decision.

This may well be seen by Scottish farmers as good news, since the biggest threat with Mercosur is to the beef industry, with Brazil and Uruguay set to enjoy better access to Europe.

While Mr Schulz made this claim during the negotiations, it would demand a change of rules.

Trade agreements are negotiated by the European Commission, but they must be ratified by each member state. If the UK is still an EU member at that point, which is likely, legislation would have to be changed to exclude it.

The danger, however, is that the UK will seek to negotiate directly with Mercosur and may be more generous than the EU over access for food, to buy a wider deal.

GLYPHOSATE RETHINK?

The European Commission’s restrictions on glyphosate – the active ingredient in Roundup and the world’s most widely used herbicide – are becoming increasingly difficult to justify.

New Zealand, which is proud of its green credentials, has said there is no carcinogenic risk, while opposition in Europe among scientists is weakening.

The product’s manufacturers have said they will make all their scientific information freely available for people to assess the risk.

The action by Brussels has been widely seen as political rather than scientific, leading to an unnecessary demonising of the product and creating a situation where green groups will oppose any weakening of the restrictions.