Does history tell us about release of SMP intervention stocks?

Published 13 October 16

Increasing wholesale prices for skim milk powder has eliminated the current need for intervention and no new stocks have been offered into intervention since the first week of September. However, there remains in excess of 330,000 tonnes of SMP in intervention stores, equivalent to around one-quarter of what the EU-28 typically produces in one year.

Focus is now turning to when and how the powder stocks will be released by the Commission, and whether this hampers the recovery in powder prices. However, it seems unlikely that these will be released during the current scheme, which is not due to close until the end of 2016.

According to a spokesperson for DG-Agri, speaking at the recent Eucolait meetings in Brussels, the Commission has discretion when to start accepting tenders to sell product out of intervention. However, it was suggested that this decision will be made to ensure that the release of product will not disturb the market.

Following the last build-up of intervention stocks, the Commission sold stocks over a two-year period, with more than half sold at the height of the market, which will have minimised the financial cost of the scheme.

Some of the product was also distributed as food aid, which helped to limit the volumes placed on the market. The scheme is now managed through national envelopes, meaning any decisions to use current intervention stocks for food aid will require an agreement across Member States. This discussion is expected to occur at the October animal products committee meetings.

Intervention stock evolution