Market report: All export refunds removed as dairy market strengthens

EU milk market managers have removed all remaining export refunds on dairy products – another sign of the improving global market.

In October, the EU Commission set skimmed milk powder export refunds at zero, and earlier this month it did the same for whole milk powder, condensed milk and cheese. It has now removed the remaining subsidy for butter and butter oil, meaning all exports must compete unaided.

The decision was taken as part of the deal to create an EU emergency milk fund of €300m. The EU Commission’s original plan was to set this at €280m, but the European parliament wanted more. The decision was taken to increase it by €20m, but with the money coming off export refunds.

Addressing farm ministers in Brussels last week, EU agriculture commissioner Mariann Fischer Boel said that EU butter and SMP prices were 29% and 23% above their respective intervention prices, while EU cheese was 11% above its June value. “Since June, world market prices have increased between 40% for cheese and almost 80% for butter,” she said.