Storage Aid closes at peak use and still no intervention sales

Published 8 March 17

Stockpiles are weighing heavily on European SMP markets, particularly with the spring production peak approaching. Applications for Private Storage Aid (PSA) for SMP recently reached their highest level since the scheme opened in 2014, but the support measure closed a week later on 28 February. This was the closing date given by the European Commission, after a series of extensions to the scheme. 

PSA 8mar17

In addition, the latest tender for the sale of SMP from intervention ended on 21 February, with no product sold. The highest price offered was €1,804/tonne, around €125/tonne below the market value for the week, and the European Commission rejected all offers. This was the fifth tender, with just 40 tonnes having been sold so far, leaving 350k tonnes still in intervention.

The volumes and prices offered for intervention stock have reduced since the tendering process began at the end of last year, suggesting buyer interest has waned. Buyers may be waiting to see how much milk is produced over the flush and how this affects pricing, before committing to deals.