Dairy Producers In US, Other Countries Warn Against EU Dairy Stockpiling Effort

The coming start of government-financed intervention purchases of skim milk powder (SMP) and butter in the European Union (EU) is prompting concern among U.S. and other dairy producing countries. A coalition of dairy organizations from Argentina, Brazil, Chile, Costa Rica, Ecuador, Guatemala, Mexico, Paraguay, Uruguay and the United States issued a joint statement calling on the EU to not take action similar to what it previously when its 2016-17 intervention efforts resulted in it accumulating an equivalent of 16% of the global SMP market in government storage. The release of those stocks over the next two had “unfairly” undercut international prices. “The EU intervention program would artificially distort prices for an extended period and displace commercial competition just as the world begins to recover from the immediate impacts of the COVID-19 pandemic,” the groups said, noting the export of government purchased SMP and butter had taken place at below-market rates. Instead, the groups called on the EU to take steps that spur consumption within the EU “and encourage its producers to implement appropriate production practices to survive at this difficult time.”

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