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Dramatic and bold action required by European Commission

Current 20c per litre Intervention Price should rise to 26c per litre to counter recent collapse in dairy markets

BRUSSELS, Wednesday 3rd September 2014 – Speaking ahead of a meeting today with the European Commission, T.J. Flanagan, ICOS Dairy Executive,  said that the recent collapse in dairy markets, where the Fonterra auction prices have almost halved since the Spring, was such that a dramatic and bold move was needed by the Commission to halt the decline.

While he welcomed the recent moves on introducing Storage Aid for Butter SMP and some cheeses, he said that the Commission’s failure to at least consider targeted Export Refunds, was disappointing.

What is needed, he said, is a strong statement that would boost sentiment in the markets.

He called on the Commission to change their minds on Export Refunds and to instigate the process of increasing Intervention prices from their current level, equivalent to 20c per litre, back up to the level they were at a decade ago, around 26c.

Milk production costs have skyrocketed in the last ten years and the present 20c support level is plainly not adequate, he said.

Flanagan further stated that the EU should fund these measures from outside the Common Agricultural Policy (CAP).  The difficulties caused by the Russian embargo are clearly Geopolitical and are not Agri-related.  Overall decisive action is now required by the European Commission on the Intervention price.