5 July 2002

Milk prices threat

MILK prices are under renewed threat, with Brussels accepting the first tenders for skimmed milk powder into intervention at less than the full support price.

Operating the tender scheme for the first time in over 10 years, market managers agreed to take 6664t of SMP at k2024/t (£1309), or 98.5% of the full intervention price.

The tendering system has been triggered because sales to intervention have already exceeded the maximum 109,000t allowed from March to the end of August.

It is understood that the commission had hoped to take in less than it did by setting the cut-off price even lower.

But vigorous complaints by Irish representatives at the management committee meeting persuaded it to raise the threshold.

The Irish Farmers Association says the move is a further threat to producer prices and has requested an emergency summit with agriculture minister Joe Walsh next week.

"Dairy farmers have already faced income losses of over 30% as a result of price cuts and increased production costs," said president John Dillon.

The wet weather of recent months had compounded their problems, affecting both the quality and quantity of silage put away for the winter.

But the critical issue for now was to hold June prices.

Apart from the SMP purchase, Brussels also accepted a further 7372t of butter into store.

But there were no changes to export refunds or internal processing aids, needed to stimulate demand for dairy products. &#42