Brussels cuts dairy refunds again

EXPORT REFUND rates for dairy products were cut again last week by market managers in Brussels in the run up to the introduction of lower intervention prices in July.

The EU Commission cited growing export potential on the back of the weakening euro as the reason for the extra cuts, which come on top of those in May.

But Tom Hind, the NFU’s chief dairy adviser, said it flew in the face of industry opinion.

“The commission is sending signals that it expects the market to go down after July 1, while we see signs of buoyant global commodities prices.”

Export refunds cuts

Butter: down 25% to €97/100kg
Whole milk powder: down 5% to €52.10/100kg
Cheese: down 7.3% to €56.30/100kg.
Casein aid: down to €0.52/100kg

Refunds are no longer available for low-uptake cheeses.

The move also attracted bitter criticism from Irish farming leaders who accused the commission of pre-empting the dairy price cuts agreed under CAP reform.

Some 58% of intervention butter and 61% of skimmed milk powder currently in EU stores was sold by Irish co-ops.

Michael Murphy, national dairy committee chairman at the Irish Farmers’ Association, said the cuts would cap the market.

“However, it is obvious that our own industry has shown too little market initiative, and remains alarmingly dependent on intervention commodities,” he said.

Co-ops must address the industry’s inefficiencies and seriously tackle the undervalued product mix if they are to deliver viable milk prices into the future, he added.