As EU dairy market prices continue to defy the average intervention price cuts of 6% on July 1, the Commission again took out the knife to export subsidies last week in an effort to bring domestic prices down.
The subsidy on exporting skim milk powder was cut 17% to 1290 per tonne, whole milk powder by 6.7% and butter 4.3%. Export subsidy rates for cheese were brought down by 16.5% other than on cheese exports to the US where the cut was 60%.
In recent weeks, EU domestic prices have remained steady or firmer and the fact intervention prices were to drop in July has been shrugged off by a positive market situation.
This is embarrassing for the EU Commission where, as part of the Mid-Term Review, European Union dairy farmers will start receiving compensation later this year to offset the expected lower market prices resulting from intervention price cuts.