Farm leaders have welcomed the launch of a European watchdog to keep an eye on the more volatile post-quota milk market.

EU agriculture commissioner Dacian Cioloș (pictured) unveiled the European Milk Market Observatory in Brussels earlier this week, calling it a “crucial tool” in the run up to quota abolition on 1 April 2015.

The observatory will gather accurate data from across Europe on prices, production and consumption on its website, and produce market analysis and forecasts.

The European Commission will use this information to publish reports to guide future policy.

A board of 40 dairy industry experts will meet quarterly to discuss developing trends, with the first meeting scheduled for 27 May.

NFU chief dairy adviser Rob Newbery said the announcement was a relief as it was not coupled with new market-management controls.

“The challenge and opportunity in the market is the global demand,” he said. “If we are constrained by old-fashioned market-management, that does not do us any good.

“The thing for us now is that the observatory can actually provide a useful reference for something such as a futures market in milk.

“In the USA, they use the USDA [US Department of Agriculture] dairy market information as a reference and we have not had anything like that.

“Everyone is talking about the potential of futures to help farmers manage volatility and it is helpful for farmers to have more robust and useful market information.”

Mansel Raymond, milk party chairman of European farmers’ union Copa-Cogeca, said the body’s launch was a step in the right direction as long as it was run properly.

“This information must be up-to-date and forward-looking so that producers can base their business decisions on possible future trends,” he said.