IFA National Dairy Committee Chairman Tom Phelan has taken issue with EU Agriculture Commissioner Phil Hogan’s statement warning farmers not to expect the EU would “bail them out” if milk prices drop.
Farmers do not want a bail out, Mr Phelan said, they want the EU Commission to live up to its responsibilities on market management, especially around SMP intervention.
“Farmers legitimately expect the EU Commission to play its full part in ensuring that the market management tools within the CAP are fully and properly utilised to provide a ‘safety net’ for farmers when markets weaken,” Mr Phelan said.
“Butter prices, which peaked at €6500/t last September, have weakened to levels that remain far above historical averages, and have even picked up again in recent weeks: up €310/t since mid-January to €4720/t. The main reason dairy experts expect a more challenging 2018 is the price-depressing effect of the persistent stock of intervention SMP, which it is the responsibility of the EU Commission to manage to avoid market disturbance.
“Right now, this must mean selling SMP out of intervention at the highest possible price, possibly by parcelling out the stock by age and possible use, in order to maximise the price of the fresher stock, and to minimise any potential negative price impact on the trade of freshly produced milk powder.
“When intervention re-opens, without the security of the fixed-price buy-in, the EU Commission will also have to make very judicious price decisions to ensure that it does not lead buyers to expect even cheaper SMP in 2018.
“Farmers do not expect a bail out, but they are legitimately entitled to expect that the CAP tools available to the EU Commission to manage markets are utilised optimally, as they were intended, for the purposes set out for them in the current Common Agriculture Policy,” Tom Phelan concluded.