EU Dairy Package Includes Millions to Reduce Milk Production

The European Commission has presented a new package of measures worth €500 million from EU funds to support farmers in the face of ongoing market difficulties, particularly on the dairy market.

The package includes an EU-wide scheme to incentivise a reduction in milk production (€150 million) and aid to be defined and implemented at Member State level (€350 million).

In the UK, NFU dairy board chairman Michael Oakes commented: “In terms of a voluntary management scheme, UK farmers have reacted to market conditions accordingly with production already pulled back significantly - daily deliveries for the last two weeks of June are nine per cent lower than the same period last year. This is without financial incentive.”

Some farm organisations also suggested that €150 million would not be enough for an effective voluntary reduction in milk supply – click here to read more.

In market news, this week's Global Dairy Trade auction on Tuesday showed no change in the GDT index of prices traded for dairy products.

Whilst skimmed milk powder fell in price by 1.1 per cent, whole milk powder rose by 1.9 per cent. Butter prices fell by 5 per cent, and cheddar prices by 1.1 per cent.

Arla announced it is holding its August milk price, with Arla Foods amba board director, Johnnie Russell, commenting: “The strengthening of commodity markets, as well as some European retail markets, indicates that markets are continuing to firm and we believe that the market situation is more stable.”