Germany asks EU to sell SMP stocks

Through the sale of intervention stocks of skimmed milk powder (SMP), the EU Commission can financially support the European Aid Fund for the most deprived. This allows the most vulnerable people in a country concerned to be supported at the request of the individual EU member states. The German Farmers’ Association (DBV) has now called on its federal government and the EU Commission to implement this aid in Germany in a timely manner.

At present there are more than 350,000 tons of milk powder in public storage facilities, which were stored during the two-year milk crisis. President of the DBV Karsten Schmal welcomes the decision. “The EU Commission wants to help with the very sensible use of agricultural products and to ease the current market situation as quickly as possible,” he says. “This is an important signal for us dairy farmers. If not now, then when?”

Thus, not only the large stock of SMP on the dairy market could be reduced more quickly, but the aid fund could be strengthened as well.

In the past few months, the European Commission has not succeeded in selling significant quantities of SMP via current tendering procedures.

“The inventories must be dismantled according to the current producer prices for dairy farmers,” stresses Schmal.

At the moment a producer price of more than €0.39 per kg for the coming 12 months can be hedged in Germany at the Warenterminbörsen, which is clearly above the average of producer prices for the past ten years.

In the past, the European Union has successfully used other instruments to market SMP from intervention in order to reduce market pressure. An examination of the reactivation of such tools can be carried out if the stocks of SMP cannot be significantly reduced, despite the ongoing activities of the EU Commission, the DBV notes.