The New Year dawns

As the New Year rings in on the international dairy industry, here’s hoping that this year is a little less eventful than last year. The Japanese earthquake’s effects are still being felt, and in upcoming issues we will be covering Thailand’s disastrous floods and the outlook for the dairy industry there. Natural disasters loomed large for several countries and affected dairy operations badly.

By the time you read this, I hope the Scandinavian butter shortage is a thing of the past, but I suspect it will take some time for stock levels to recover. As the Norwegians, Finnish and Russians have discovered, you never know how much you rely on dairy until it’s not there.

We will also have to wait until next month to see the outcome of the recent European Union dairy package, which is amending rules to seek to give farmers more bargaining power, allowing producer organisations to negotiate prices with processors, where volumes of raw milk negotiated do not exceed 3.5 per cent of total union production, 33 per cent of total national production or 33 per cent of combined national production. While on the face of it this sounds promising, there is a get-out clause in the form of Article 185f, which allows member states to decide whether or not written contracts covering milk delivery from farmers to collectors or processors is suitable for their territory.

The UK’s National Farmer’s Union has cried foul, saying the proposals don’t do much more than maintain the status quo for farmers. The NFU is going to push for minimum contract terms from Defra. Dairy UK isn’t happy either, noting that it thinks voluntary contractual arrangements are the “most appropriate for the dairy industry.”

At any rate, we will see what the result of all this cat-herding and compromise is in February, when it is voted on in the EU Parliament. Sometimes it seems to me that the European Union goes for a one-size-fits-all arrangement for the 27 countries, when there is a need for a more bespoke solution depending on the country. This recent movement makes me think that there will be much copy written about the law of unintended consequences because of the EU dairy package.

I doubt 2012 will be any less eventful than 2011, but I hope everyone has a healthy and prosperous new year.