At present, there are 380,000t in storage and addressing the Farm Council in Luxembourg on Monday, Hogan said this product must be disposed of as soon as possible.
Hogan charged buyers to “come up with bids that are in keeping with market reality”.
However, according to Agra Facts, he ruled out shutting intervention altogether saying the European Commission will “decide what volumes should be accepted and at what price”.
He added that intervention would “remain available as foreseen in the basic act, but it would be operated in a more controlled manner, on the basis of prevailing market conditions”.
A measly 140t of SMP has been sold out of intervention with both buyers and sellers holding firm.
The longer SMP remains in storage across Europe, the more it loses its value. SMP has a shelf life as a food product of 15 months after which it becomes feed.
The SMP could end up as pig feed.
Victim of success
SMP is a by-product of butter.
For every 1t of butter produced, 2t of SMP is created. As the demand for butter has increased, it has, as a result, created this large overhang of SMP on the market.
Hogan said since intervention was opened approximately one year ago, the “market situation has substantially changed” driven by “strong demand for butter and cheese” but this has created a “weakness on the protein segment (SMP)”.