Hogan: No increase in milk production expected in 2015
Speaking at an EU press conference held to mark the end of milk quotas on 31 March, the EU Commissioner for Agriculture Phil Hogan said he does not expect an increase in milk production in 2015.
EU Commissioner for agriculture and rural affairs Phil Hogan addressing the IFA 60th anniversary commeration of its foundation at the Convention Centre Dublin.
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The Commissioner said this is due to the fact that production already rose by 5.5% last year.
He added that compared to 30 years ago when milk quotas were first introduced dairy farmers are now working in a more market oriented sector and that for the first time in those 30 years European dairy producers will respond only to market forces.
Milk price volatility
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In relation to milk price volatility, the Commissioner said that market mechanisms are in place to deal with such volatility should it arise and added that the EU is exploring opportunities to confront short-term volatility by integrating supply chain contracts, fixed contracts, forward contracts and price differentiation according to volumes.
He addressed fears that there would be major volatility post-quota by citing predictions of a collapse in milk prices made last year, saying that prices are today the same as they were in January 2013. The average milk price now stands at 32.5c/litre.
Milk quotas
Milk quotas were first introduced in 1984 at a time when EU production far outstripped demand. The quota regime was one of the tools introduced in overcoming these structural surpluses.
The final date to end quotas was first decided in 2003 in order to provide EU producers with more flexibility to respond to growing demand, especially on the world market. The deadline was reconfirmed in 2008 with a range of measures aimed at achieving a "soft landing" for farmers when quotas are abolished on 31 March this year.
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The Commissioner said this is due to the fact that production already rose by 5.5% last year.
He added that compared to 30 years ago when milk quotas were first introduced dairy farmers are now working in a more market oriented sector and that for the first time in those 30 years European dairy producers will respond only to market forces.
Milk price volatility
In relation to milk price volatility, the Commissioner said that market mechanisms are in place to deal with such volatility should it arise and added that the EU is exploring opportunities to confront short-term volatility by integrating supply chain contracts, fixed contracts, forward contracts and price differentiation according to volumes.
He addressed fears that there would be major volatility post-quota by citing predictions of a collapse in milk prices made last year, saying that prices are today the same as they were in January 2013. The average milk price now stands at 32.5c/litre.
Milk quotas
Milk quotas were first introduced in 1984 at a time when EU production far outstripped demand. The quota regime was one of the tools introduced in overcoming these structural surpluses.
The final date to end quotas was first decided in 2003 in order to provide EU producers with more flexibility to respond to growing demand, especially on the world market. The deadline was reconfirmed in 2008 with a range of measures aimed at achieving a "soft landing" for farmers when quotas are abolished on 31 March this year.
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