Lead on, Europe

The European Dairy Association’s policy conference is always a lively one. Plus there is a cheese buffet afterwards and it’s in Brussels, so it is a no-brainer. This year, the inevitable topic was the end of quotas.
The end of quotas! The long-awaited event is upon us in less than two weeks. Michel Nalet, president of EDA, says he hopes there is a smooth transition to non-quota life in the EU, and there was plenty of information about what countries such as Ireland are doing in the wake of the end of quotas. Glanbia’s €185 million spent on a massive whey dryer in the country was mentioned more than once. Jim Nicholson, MEP from Northern Ireland, told the audience that “We shouldn’t wait for New Zealand and the US to tell us what the price of milk is going to be, let us tell them.” Fighting words.

Volatility was also a buzzword. Tom Tynan, also of Ireland (Phil Hogan, the current European Commissioner for Agriculture, is Irish and Tynan is a member of his cabinet), suggested that getting more transparency in the market through the tools of the Milk Marketing Observatory, where countries input their milk volumes and so forth, would help.

Then the questioning began. There was some debate from French participants about whether the Irish method would work elsewhere in EU. People rushed to get the translators. Mansel Raymond of COPA asked for some support, and wondered if the last year of superlevies might not be ring-fenced for helping struggling dairy farmers. This was quashed by Tynan. The money will go into the general budget, he said. Nicholson pointed out that the problems could be alleviated by greater cooperation for the benefit of all, rather than it being processors versus farmers, as it too often is: “Volatility is here to stay and we don’t see an end to it.”

Whew! Then it was time for the well-deserved yogurt break. Jais Valeur, EDA’s vice president, executive vice president of Arla Foods, and always one with a good quip, moderated the second session. He noted how well the Danish industry have been doing, in the space of 10 years. Half the cows gone, 90% of farmers no longer working, but the same amount of milk produced. Arla’s 13,500 farmers have told the board that they will be producing one billion more kilograms of milk next year in the country. Impressive. He also exhorted the EU to be a leader rather than following. There was a theme.

Safety nets and intervention prices per litre were mentioned. Valeur pointed out that one has to be careful not to set safety net prices too low, lest everyone be dead by the time they hit it.

Professor Holger Thiele had some encouraging news about how the EU dairy industry has already benefitted from world market developments, but called for more risk management in dairy markets, perhaps in the area of futures. After him came Eric Andrieu, MEP from France, who started off by saying he loved Ireland and Irish people. But he too was sceptical about the Irish model being repeatable.

So, the end of the conference was nigh. A lot of things were discussed, and in some quarters, feelings may have been hurt.

Then, Francis Reid of Fonterra stood up and said, “Our view of Europe is that it has a competitive dairy sector. New Zealand’s output is increasingly constrained due to environmental issues. What would you recommend Europe should do to meet the future 9 billion consumers’ demand?” And Valeur said, “Fonterra is investing in Europe, and we think we’re in a crisis!”

I came away thinking, Europe, don’t fight. It upsets Fonterra. It believes in European dairy, and you should too. Group hug.