The row between the IFA and EU Agriculture Commissioner Phil Hogan on dairy intervention prices is continuing.

IFA president Eddie Downey wrote to Commissioner Hogan outlining the organisation’s stance for what it sees as the necessity to raise intervention prices. Currently, EU intervention prices are at approximately 21c/l/. Hogan responded to the IFA and again offered little prospect for raising the support level.

In a letter to Downey, Hogan said that “global demand (for dairy products) is declining and supply has to be adapted accordingly”.

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Hogan added that “market balance will only be restored once adjustments are effectively introduced in terms of reduced supply and increased outlets”.

The Commissioner also said that there is an onus on farmers to “follow market signals” with regard to supply.

IFA dairy committee chairman Seán O’Leary has hit back at Hogan, claiming that the Commissioner is offering little in the way of support to Irish and European dairy farmers.

“At the equivalent of 21c/l, the current SMP and butter intervention prices do not provide the type of safety net which the EU has legislated for,” O’Leary said.

“What we have been asking our Minister and the Commissioner to do is, first and foremost, to set a review in train. It will take time for that review to be completed and any adjustment to intervention prices to be made.

“However, in the shorter term, far from encouraging greater production, this announcement would help sellers better stand up to exploitation by buyers,” O’Leary added.

In recent weeks, the IFA has indicated that dairy farmers are now entering a “loss-making” territory. However, the Commissioner, in his letter to the IFA, flatly rejected that theory.

“In no way does the Commission acknowledge that milk prices have fallen below the cost of production.”

Volumes

Meanwhile, the Irish Farmers Journal can reveal the volume of dairy products Ireland has put into storage since the private storage aid scheme was launched in late 2014.

Ireland has sent 39,853t of cheese into storage, with the whole of Europe having put 328,710t of cheese into storage.

We put 5,469t of the total 126,635t of skim milk powder into storage, while of the 280,991t of butter Europe has put into storage, Ireland put 40,720t of that.

The Lithuanian government applied for dairy intervention from the European Union on Wednesday, with more than 1,000t of milk powder expected to be taken off the market in the coming weeks.