335 euros as honest price threshold for intervention milk powder

(Brussels, 15/05/17) There was too much milk powder in the past and still the milk market cannot cope with it: there are currently some 350,000 tons of skimmed milk powder stored in intervention, and in view of the tense situation in the EU milk market that volume lies as heavy as lead in the stomach. Although at present raw milk prices in the EU are a little higher than a few months ago, at an average of 33 cents/litre they are still way below a cost-covering level. As the president of the European Milk Board (EMB) Romuald Schaber explains, another sharp drop in milk prices would be certain if the EU Member States were to sell the intervention powder at the current low market price of 175 euros/100 kg. “But the price of 215 euros/100 kg set by the EU is also too low, and would exert too much downward price pressure”, Schaber points out. The intervention milk powder should only be sold at a stabilising price. Taking as a basis production costs of over 40 cents per litre of raw milk, which is the case in the strong intervention countries such as France, Germany and Belgium, and adding on transport, processing and marketing costs, the result is a price of at least 335 euros/100 kg of milk powder