International trade features at Milchforum

The 10th annual Berlin Milchforum took a look Germany’s international trade picture and provided a happier outlook for some sectors. Peter Stahl, chairman of the Dairy Industry Association (MIV), noted, “The interests of dairies and milk producers with regard to future strategies are not so far apart, as is often suggested by some sides.”

Milk deliveries in Germany increased again in 2018 compared to previous years in parts of Germany, despite the drought in some regions.

German producers delivered 1.5% (31.7 million tons) more milk last year than in 2017. Milk producer prices for conventional cow’s milk in Germany in 2018 were €0.34/kg, which was five per cent less than in 2017.

The market for skimmed milk powder was significantly friendlier than 2017.

“After prices have fallen to a historic low, the EU has swiftly and carefully sold the large quantities of skimmed milk powder almost completely out of intervention. This was an end to horror, so hopefully we will not need the intervention in the future, ” Stahl explained.

Work on the sector strategy is progressing. “Developing a strategy for a whole sector through different stages is not an easy task,” Stahl said.

One subject was the contractual relationship between milk producer and dairy.

“There are already a large number of different contracts between dairy and dairy farmers. And if both sides want to set a quantity limit, they should also be happy to do so,” Stahl said.

“A mandatory introduction of contractual components such as quantity and price does not seem likely to undermine the international commodity markets. So, I find it hard to agree to such a field trial because I do not think that will work,” he noted.

The market outlook is currently closely linked to developments in Brexit, according to the MIV. The UK continues to be a very important milk trading partner for the Germans.

“The current likely shift of Brexit without concrete target and agreement extends the uncertainty for all market participants in Germany and Europe,” said the chairman. “But I am convinced that the German dairies on any form of Brexit quickly and accurately react and develop appropriate strategies”.

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