Raymond said that the gradual reduction in intervention levels over the past decade has meant that EU milk prices are now on a par with global prices and that a new policy framework is now required to support EU producers.

“The EU is the largest milk producing block in the world and has the potential to be the biggest player on the global market. At present, about 10% of EU output is exported but with global demand increasing by 2% per annum the EU can now supply this growing market” said Raymond.

Speaking today at the Spring Conference of the Society of Dairy Technology in Co. Tyrone, he said that the new policy must support all dairy farmers in improving efficiency and ensuring a sustainable return on their investments.

Raymond said that “the recent changes to the CAP, with the introduction of the Greening and Ecological Focus Area measures, have done nothing but add cost, complication and impracticality for dairy farmers.”

He said that new policy measures are required to support exports of dairy products.

“From now on, export refunds will be funded from the direct payment budget so this is not an attractive option as the direct payment fund has already been cut by 15% in the recent CAP reform," he commented.

"Exporters could be supported by introducing mechanisms such as credit risk insurance which would reduce the risk for processors of bad debts when exporting to new, undeveloped markets.”

Cautioning against the introduction of new production limits, he said that whatever mechanisms are established in the future must be voluntary between producer and processor.

“Copa Cogeca see a strong role for forward selling, or guaranteed price mechanisms in the future. While such mechanisms protect farmers from the lows of milk price, it is important to bear in mind that they also prevent them from receiving the highs of milk price” he said.

Speaking on the Russian ban on EU imports, he said the Baltic States were most affected. “while Northern Europe sold butter and cheese into Russia, the Baltic States exported fresh dairy products this market closed effectively closed for them overnight” he said.

The Welsh farmer said that Copa Cogeca are pushing hard for an increase in the intervention price for milk.

“The present price of 22 c/l is too low especially when we know that the average cost of production in countries like the UK is over 30 p/l. While intervention price will always be lower than cost of production we feel that the gap should be closer,” Raymond said.