The EU dairy quota regime comes to an end today, moving the industry to a market orientated system for the first time in 30 years.
Speaking last night, NFU diary board chairman Rob Harrison urged all European countries to “act responsibly and collectively” to protect against future market volatility.
He warned that some EU countries were showing signs of rapidly increasing their output without an end market for goods, which would push farmgate milk prices down further in Europe and stall recovery in the sector.
“It’s vital that expansion in any Member State is planned in accordance with available market opportunities,” he said.
However, Phil Hogan, EU Commissioner for Agriculture & Rural Development, said he did not expect any major post-quota increase in European milk production.
He recognised that there would be concerns over market volatility, but assured producers the EU would continue to use available market mechanisms in the “event of a serious crisis”.
“After a long time of strong government involvement in the dairy market, the industry now has to find its way to adapt to volatility, but we will continue to monitor, through the milk market observatory, the situation as it unfolds in 2015,” he said.
Hogan said that while the end of quotas would no doubt prove challenging, it should also be viewed as an opportunity.
“This is coming at a time when global demand for milk products is increasing at an average of 2% per annum, so the removal of these production constraints in the dairy sector can be looked upon with optimism.”
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