First UK milk powder enters EU crisis scheme

Milk powder from British farmers has been sold into the EU’s emergency intervention scheme for the first time this crisis.

So far 432t of skim milk powder (SMP) from the UK has been offered into the programme, which pays dairies a fixed, low price to try to put a bottom in the market.

Almost 6,000t has now been sold into intervention since mid-July, with Belgium the biggest user so far.

See also: World dairy prices rise for first time since March

Farm leaders and dairy sector bosses have called on the EU to raise the intervention price, but farm commissioner Phil Hogan has consistently turned down requests.

The SMP rate is set at €1,698/t (£1,209/t), with the butter price at €2,464/t (£1,755/t) – though no butter has been offered so far.

AHDB’s market indicator suggests processors could receive about 14.1p/litre if they used the emergency measure.

The levy board’s actual milk price equivalent, which tracks market returns for butter and SMP, stood at 16.7p/litre in July.

Trader INTL FCStone’s weekly report said intervention interest was building.

“Although we have not yet seen the tsunami of offers some commentators were expecting, EU intervention for SMP is slowly starting to see the volumes offered into it increase,” the report said.

Dairies are able to sell 50,000t of butter and 109,000t of SMP into the intervention scheme at fixed prices. After that point, product has to be tendered.

A new set of volumes will be opened up in January 2016.

The commission’s other emergency tool – private storage aid (PSA) – had also been used heavily.

Since last September, more than 125,000t of butter and 42,000t of SMP has gone into PSA, which pays dairy firms to keep their products in store and off the market.