SMP intervention stock halved since 2015
Latest figures from the EU Commission show skimmed milk powder (SMP) intervention stocks have been halved and that trends suggest dairy prices should steadily increase for the remainder of the year.

Half of all the skimmed milk powder (SMP) bought into public stock since 2015 has now been sold back on to the market.

Following the latest tender on 8 November where 30,000t was sold, there remains just 190,000t out of the original 380,000t.

EU Commissioner for Agriculture Phil Hogan said their cautious approach was paying off, as the market balance had not been jeopardised.

He said: “Market balance is always our priority. It is encouraging to see an improvement in farmgate milk prices again, helped by the measures the Commission has put in place.

"There is, however, no place for complacency and prudential production decisions must continue to be made by reference to the realities of market conditions.”

Intervention stocks were used between 2015 and 2017 to remove surpluses in a situation when markets were “extraordinarily imbalanced”. From the end of 2016, the Commission began putting these stocks back on the market through a process of monthly and bi-monthly public tenders.

The next tender will take place on 22 November.

Prices and production

The latest data from the EU Milk Market Observatory (MMO) suggest steady increase in dairy prices with some fluctuation:

  • SMP: EU SMP prices have been fluctuating below intervention level (€170/100kg) for the past 12 months. The situation has been slightly improving since May 2018.
  • Milk: after coming down to a price level of 32c/kg in May 2018, an upturn has taken shape, with an average price of 35c reached in September 2018.
  • Butter: in a trend not seen since 2017, EU butter prices have been over €5,000/t for the past six months.
  • Cheese: EU cheese prices continue to be good, despite slightly increased stocks at manufacturers' level. Consumer demand for cheese appears as robust as ever.
  • Modest production increase

    After strong production growth in the first half of the year, cumulative EU milk production for the whole year is projected to end in a modest 0.8% increase.

    According to the Commission, key factors for milk production in the last months of the year will be weather developments, but also milk and feed prices.

    In a statement, it said: “This will determine the ability of farmers to buy animal feed to compensate for lower forage availability due to the summer drought.”

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    Surge in demand for dairy worker permits
    Almost all permits available for dairy farm assistants from outside Europe have been issued by the Department of Business.

    There has been a surge in demand from dairy farmers for work permits allowing for workers to come to Ireland from outside Europe.

    In May 2018, 50 permits for dairy farm assistants from countries outside the European Economic Area (the EU plus Iceland, Liechtenstein and Norway) were made available by the Department of Business.

    By the end of 2018 just 11 of these permits had been issued, though number have risen sharply since the start of the year.

    In response to a parliamentary question from Fine Gael’s John Deasy on 18 April, Minister for Business Heather Humphreys confirmed 49 of the permits have now been issued.

    Farmers are required to pay permit workers a minimum of €22,000 a year based on a 39-hour week.

    Uptake

    Employment permits were also introduced on a pilot basis for meat factory operatives and horticulture workers.

    There has been major demand for permits from processors. Having been initially granted 250 permits, factories were given several increases, with 1,500 now available. A total of 1,339 permits have been issued so far.

    Uptake has been much slower for horticulture permits. Just 91 of the 500 available permits have been issued.

    In total, 1,479 of the 2,050 permits have been issued.

    Pig farmers

    Deasy queried whether the unused permits could be allocated to pig farmers. Minister Humphreys said the permits were not transferable and the role of pig farmer is currently on the ineligible occupations list.

    The Minister elaborated, saying: “A submission was made to the most recent review of the occupations lists on behalf of the pig farmer occupation. However, available research does not indicate a shortage of labour in the sector.

    "It is proposed that the sector provide more information, in particular detailed evidence of efforts to recruit from within the EEA for consideration during the next review.”

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    Just under 2,000t of SMP remains in EU intervention stocks
    As intervention stocks are nearly cleared, the latest SMP sale saw just 33t sold at a price of €1,660/t.

    There is just under 2,000t of skim milk powder (SMP) remaining in European intervention stocks following the latest SMP sale.

    A small amount of 33t of Finnish stocks was sold at the most recent tender on Tuesday 16 April. It sold for €1,660/t.

    The next tender will take place on 21 May when 1,106t will be offered. The vast majority of the remaining stocks are in Spain, while there are smaller amounts available in Germany, and the UK.

    Some 380,000t of SMP has been sold out of intervention over the last 12 months, with all Irish stocks having been cleared in February.

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    Milk Quality Ireland to address the challenges of dairy
    The transition to selective dry cow therapy will be an important issue for Milk Quality Ireland.

    The Irish Milk Quality Co-operative Society Ltd (IMQCS) has changed its name to Milk Quality Ireland Co-operative Society Ltd following a decision by its committee of management.

    Milk Quality Ireland is a collaborative body with a remit in the area of dairy farm infrastructure, which includes representatives from the Irish Co-operative Organisation Society (ICOS), the dairy co-ops, Teagasc, milking machine manufacturers and milking machine technicians.

    It was established 30 years ago in 1989 to improve milk quality standards in Ireland, to provide suitable training and certification programmes in milking machine testing and installation and to strive to ensure that Irish milking machine installation and testing standards equate with best international practice.

    Milk Quality Ireland also maintains a register of certified milking machine technicians, with 263 technicians currently on the Milk Quality Ireland register.

    Milk Quality Ireland will continue this important work with a renewed focus on helping the dairy industry and farmers to meet significant new demands

    The chair of Milk Quality Ireland Jerry Long said: “I’m extremely pleased to announce the unveiling of Milk Quality Ireland. In recent years, we have focused on broader areas of milk quality, as well as providing training and certification of milking machine technicians.

    “Milk Quality Ireland will continue this important work with a renewed focus on helping the dairy industry and farmers to meet significant new demands in relation to milk quality.

    “These new demands relate to the adoption of non-chlorine cleaning protocols for milking equipment and bulk milk tanks, which will require changes to existing practices at farm level in order to respond to market requirements.

    The body will also play a vital role in ensuring that there are sustainable career pathways and fit for purpose educational programmes for the service providers

    “Furthermore, the transition to selective dry cow therapy will be an important issue for Milk Quality Ireland, as new legislation will prohibit the blanket use of antibiotics on dairy farms by 2022. This transition will require careful management including the need to scale up the level of milk recording across the national herd,” he said.

    He also said that the body will also play a vital role in ensuring that there are sustainable career pathways and fit for purpose educational programmes for the service providers that Irish dairy farmers depend upon and help to underpin the industry’s high-quality standards.

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