EU-28 Dairy Intervention Update – Jan ’21
Executive Summary Dairy private storage aid and intervention schemes have been made available to European dairy producers and processors in response to price declines and volatility associated with COVID-19. Highlights through the end of Dec ’20 include:
- EU private storage aid of butter, skim milk powder and cheese was reopened from the second week of May ’20 through the end of Jun ’20. Through the closure of the scheme at the end of June, 63,300 tons of butter, 19,600 tons of skim milk powder and 42,600 tons of cheese were added to private storage aid. Combined private storage aid stocks of butter, skim milk powder and cheese have declined by a total of 121,400 tons, or 95.4%, from their peak level as of the end of Dec ’20, however.
- Intervention schemes for skim milk powder and butter were opened at the beginning of Mar ’20, running through the end of Sep ’20. Average European skim milk powder and butter prices briefly fell below the intervention trigger price during early May ’20 but rebounded to levels 30% and 56% above the intervention trigger prices, respectively, as of the end of Sep ’20. A new intervention scheme is expected to open at the beginning of Mar ’21 however average European SMP and butter prices remain 34% and 52% above intervention trigger prices, respectively, as of mid-Jan ’21.
- Significant quantities of skim milk powder intervention stocks were purchased throughout 2016 however stocks were rapidly withdrawn throughout the second half of 2018 and early months of 2019. Total EU-28 dairy intervention and PSA stocks were completely drawn down as of the end of Jul ’19 however stocks rebounded to an 18 month high through the end of Jun ’20, prior to declining over more recent months. Dec ’20 total EU-28 dairy intervention and PSA stocks finished 121,400 tons, or 96.4%, off their recent Jun ’20 peak levels.