Phil Hogan against dairy intervention boost

EU Agriculture Commissioner Phil Hogan has opposed increasing intervention prices to help dairy farmers, warning that it “would give the wrong signal”.

“Indeed, in a situation where production quotas no longer exist, it is of paramount importance that farmers and economic operators follow market signals,” he said.

Commissioner Hogan said the EU will produce 0.9% extra milk in 2015, and outlets have to be found for it.

“There is a need to change our mindset, the goal is not to produce as much as we can, but as much as we can find a market for,” said the Commissioner.

He pointed to aid measures already in place, such as intervention and private storage for butter and skimmed milk powder available since last summer, and €40 million of special support to dairy farmers worst hit by the Russian ban.

Measures include the EU’s €66m School Milk Scheme for 19m children. Dairy farmers in 19 member states also get €820 million of coupled support (worth between €74 per cow in France and €300 per cow in Hungary).

Mr Hogan said the EU average price in May was €30.48 per 100 kg of milk, “a reasonable return for most farmers”, if applied consistently across the EU. “However, I acknowledge that the variation in prices paid to farmers in different member states can be quite significant.”

The LTO international milk price comparison for May, published by the Dutch Dairy Board for 17 dairy companies across Europe showed an average price of €30.83 per 100 kg, but this varied widely, from the €27.84 paid by Glanbia Ingredients (which Glanbia Co-op topped up €3, to a manufacturing milk price of 30.5cpl), to the €38.29 paid by Granarolo in Italy (prices for 4.2% fat, 3.4% protein, TBC 24,999 and SCC 249,999).

The comparison includes Kerry Agribusiness, where the May price was given as €28.45.

Other May prices published by the Dutch Dairy Board include €49.61 at Emmi in Switzerland; €22.76 at Fonterra in New Zealand, and €36.22 in the US for Class III 4 milk.

Commissioner Phil Hogan’s comments came as Lithuanian dairy farmers discarded 30 tonnes of milk last week, when offered only 10 cents per litre.

In Lithuania, co-op supplies are paid an average price of 16-17 cent.

According to the Lithuanian chamber of agriculture, the country’s five big milk processors are trying to put co-ops out of business.