The EU Commission is coming under increased pressure from the dairy sector to increase intervention prices. Any movement will not provide a silver bullet on price. As traders are well aware, the legislative process required to lift the price could take between 12 and 18 months. This assumes a relatively smooth passage through both the EU Parliament and the Commission, which is by no means guaranteed.

Intervention should not be seen as the only tool available to the Commission. A relaxation of the restrictions around Private Storage Aid (PSA), reducing the minimum storage period from 90 to 60 days, would increase flexibility and encourage more processors to avail of the storage support measures.

The Commission must also be prepared to show innovation in relation to creating market demand. With Europe heavily reliant on imported protein, there should be scope to incentivise the market to look at the role of EU-produced dairy protein in offsetting the import demand.

Supply and demand and free market forces are not an argument for no intervention. The reality is that neither the EU nor the global market operates freely. Within the EU, over €830m per year is paid out across some member states in the form of voluntary coupled supports on dairy cows. Meanwhile in the US, production is removed from the supply and demand balance through the margin protection measures implemented under the Farm Bill.