EU ready to offload its stockpile of SMP

THE EU is determined to offload the bulk of the skimmed milk powder it has in storage, despite pushback from producers.

The European Commission bought up around 20pc of SMP production in 2015 and 2016, at a time when raw milk prices slumped by around 50pc.

There is now around 377,000 tonnes in storage, the majority from French, Belgian and German producers.

Ireland comes in sixth place with over 37,000 tonnes in stock.

Agriculture commissioner Phil Hogan intends to put “significant volumes” back on the market while butter and raw milk prices are good. “We are determined but not desperate,” Mr Hogan told dairy processors last week, calling on them to make “meaningful bids in line with market reality”.

But producers are sounding the alarm, pressing for the stocks to be used for animal feed or donated to the poor so they don’t compete with freshly produced powder.

Mr Hogan insisted there is “no justification” for fears of a milk price collapse.

Mr Hogan also warned dairy processors and cooperatives to halt over-production before it is too late.

“Production is overwhelmingly expanding,” he said. “A 4pc increase in milk deliveries is just not sustainable.”

Lakeland Dairies chief executive Michael Hanley said the skim market is 5-6c/l under intervention price which is “very concerning”. “The overhang in the market place is a major negative shadow on dairy markets so a correction in supply is needed as soon as possible.”

He said there was over 370,000t in intervention but it was now limited in what it could be used for.

“We are paying more today for product than we are getting back from the marketplace and that has been the case since the turn of the year,” he said.

Figures show EU SMP exports were up 12pc in Jan-Feb 2018, with significant increases to Algeria and Egypt.