Milk market recovery reflected by EU SMP stock release

Skimmed milk powder (SMP) is to be offered to the market from EU intervention stores.

Member states voted to place 6.23% (22,150t) of the total 355,000t of the EU’s SMP intervention stocks back on to the market following a continent-wide dairy resurgence.

This means a small proportion of the commodity removed and placed in storage by the EU in a bid to reduce supply and push prices upwards will now start to trickle back into the market.

 See also: Rising milk prices: Is Increasing output the answer?

This shouldn’t put too much pressure on UK farmgate prices, according to AHDB senior dairy analyst Luke Crossman. 

“Buyers will soon have the option to buy limited amounts of the product but the EU will control the process and gauge the market slowly.

“This means prices UK prices should continue to go up but perhaps not at the same level as we have already seen.”

Rising prices

No SMP has entered into public storage for two months, following falling global production and EU15 and UK farmgate prices rising 7.7% and 7.3% respectively in the three months to September.

European operators now have until 13 December 2016 to submit bids for the SMP release to their national authorities.

“I am pleased to say that we are seeing something of a recovery in those hardest-hit markets,” said EU agriculture and rural development commissioner Phil Hogan.

“Reflecting the fragile nature of the recovery, the commission will act with appropriate caution and the tender process will be under constant reassessment to prevent any unnecessary disruption.” 

All of the support measures put in place by the commission to help EU dairy farmers, such as private storage and public intervention, remain in place.