Prospect for milk quota increases next year

The UK Farmers Guardian reports that Mrs Fischer Boel was forced to confirm that allowing an increase in milk production would be addressed as part of the Commission’s Health Check proposals expected in November after Germany raised concerns about rising retail prices. The Commission has a number of options, including an annual market-linked increase in quota, a reduction in superlevy, or the scrapping of restrictions on the transfer of quota between member states. A number of member states have already sought a quota increase. As I argued yesterday, increasing milk quota without at the same time sending a signal that current levels of dairy protection must be reduced by lowering support prices is likely to encourage farmers into an unsustainable increase in investment with considerable pain to follow when quotas are finally eliminated in 2015.… Read the rest

Good prospects for dairy reform

A particular milestone in the CAP was passed last month when the European Commission set export refunds on dairy products to zero for the first time ever in the management of the EU dairy regime. This reflects the extraordinary jump in world market prices for milk products in the past twelve months, with prices for skim milk powder more than doubling in US dollar terms.

World dairy product prices 1979-2007Source: USDA Dairy: World Markets and Trade July 2007

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The dairy paradox

British dairy farmers are leaving the industry in large numbers, but world milk and milk product prices are heading upwards fast. How can one explain this paradox? The simple answer is, of course, that the key UK liquid milk market is largely insulated from world market factors.

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Butter mountain finally melts

Cow in the AzoresThe satisfied look of this cow in the Azores is no great surprise as it receives one of the biggest cattle subsidies in the EU, although still not enough for Portugal who voted against the last CAP reform on the issue of the fate of dairy cows in the Atlantic islands. After 39 years of a butter mountain under the CAP, it has finally melted away. When the Soviet Union still existed, stocks of ‘ageing’ butter used to be sold off to its consumers who were glad to get any butter at all.

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EU's share of global milk production falling

The EU’s share of global milk production is falling as a result of the quota system according to Rabobank dairy specialist Mark Voorbegen. Addressing a seminar organized by Dairy UK, he said that the EU had a 27 per cent share of the global market in 2005, down from the 1995 level of 31 per cent. By 2015 it is forecast to fall to 25 per cent (although by then quotas may have been abolished).

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EU’s share of global milk production falling

The EU’s share of global milk production is falling as a result of the quota system according to Rabobank dairy specialist Mark Voorbegen. Addressing a seminar organized by Dairy UK, he said that the EU had a 27 per cent share of the global market in 2005, down from the 1995 level of 31 per cent. By 2015 it is forecast to fall to 25 per cent (although by then quotas may have been abolished).

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