AHDB reports takeup for EU milk reduction scheme

The maximum volume limit for the EU’s milk production reduction scheme has been almost reached in the first wave of applications, according to a report released by the UK’s Agriculture and Horticulture Development Board (AHDB). Member States applied to reduce production by a total of 1,029 million litres during the first period, which will run from October-December 2016. This leaves just over 11 million litres for the following reduction period(s).

This would be a 2.9% reduction for the EU-28 this October-December, compared to the same period last year, AHDB says. However, in reality some farms may not hit their reduction target and some may reduce deliveries even further. Clearly the trajectory of milk prices over the next few months will also have an impact, particularly on deliveries from those farms not participating in the scheme, it says.

The UK applied for the third largest reduction volume at 109 million litres, which would be a 3% reduction compared to October-December 2015. However, UK milk volumes are currently running much further below this, at 7.7% down for the fortnight ending 17 September. This might mean UK milk production doesn’t show a significant response to the scheme, as it seems likely that many of the farms applying may have already been cutting their production anyway, it concludes.