The EU special agricultural committee meeting next Monday will be pivotal for activation of market management tools to help the agri-food sector cope with the Covid-19 lockdown, according to Irish co-ops.
At the meeting, member state representatives will discuss the crisis with the EU Commission and can recommend actions to be taken.
Representing Irish co-ops, ICOS urged the Irish representatives at the meeting to seek private storage aid schemes for butter, skim milk powder, and cheeses.
ICOS European affairs executive Alison Graham warned that as the Covid-19 crisis deepened, global milk supply will exceed demand, and the full range of EU market support measures, and more, will be needed.
The EU co-op and farming body, Copa-Cogeca, also calls for private storage aid.
ICOS praised the work of senior management teams and boards across the co-op sector who reacted swiftly with business continuity plans and strict procedures to protect employees and to safeguard production.
ICOS welcomed the European Commission facilitating short-term export credit insurance, helping to reduce risk for Irish exporters, but Ms Graham warned new challenges were surfacing for co-ops on a daily basis.
“Irish dairy co-operatives produce a significant number of products for the food service industry, which was shut down almost entirely across much of the EU and USA, over the course of a week.
The cost of exporting too has increased considerably, due to both a shortage of freight containers and logistical staff.
She revealed co-ops are struggling to hire trucks and haulier companies. “Our ports are also operating at considerably reduced capacity, with only one ship being unloaded at a time.”
Irish companies will bid to escape the impact seen in Italy, where dairies started asking farmers to roll back milk production, because of lack of demand and labour shortages in processing.
Some smaller private processors had to close, and border restrictions blocked raw milk which Italy imports from countries such as Germany and Slovenia, leaving these countries with surplus raw milk.
Markets are challenged by both Covid-19 impacts and the oil price slump.
Global milk supply is expected to exceed demand, as the supply recovers in the Northern hemisphere (the Irish milk intake has rebounded, up by 7.8% in February). When Irish milk yields peak in May, there could be as little as 1% to 2% spare processing capacity nationally, posing a huge danger to the sector, of not being able to process all milk delivered, as it tries to cope with the Covid-19 challenge.