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Dairy market and EU policy developments
Mansel RAYMOND, Chairman of Copa and Cogeca Working Party on
Milk and Dairy Products|
Marketing dairy cooperatives, 27.09.2016, Chodov,
Czech Republic
Outline
What are
Copa and
Cogeca?
Milk
productio
n – world
and EU
World
and EU
demand
and
exports
Milk and
dairy
commodit
ies price
evolution
Copa &
Cogeca’s
requests
Prospects
world
production
and
demand
What are
Copa and
Cogeca?
What are Copa and Cogeca?
COPA
1958
23 million
European
farmers and
family members
COGECA
1959
22,000
European
agricultural
cooperatives
Fighting
for a
sustainable,
innovative and
competitive
agriculture
What are Copa and Cogeca? – cont’d
Dairy cooperatives
•
58% of the market share at EU level

add value to their members and members’ product

an important link in the milk supply chain

ensure market access for their members

add vitality to the local economy and environment, including in
areas facing natural handicaps.

help their members coping with market volatility and provide a
better price on the condition that they have a large market share
in a particular country.
What are
Copa and
Cogeca?
Milk
production
– world
and EU
World milk production
Source: DG AGRI
EU milk production
Source: DG AGRI
What are
Copa and
Cogeca?
Milk
production
– world
and EU
World
and EU
demand
World demand
Source: DG AGRI
World and EU exports
Source: DG AGRI
Sales of dairy products at retail level in the EU
Source: DG AGRI
What
are
Copa &
Cogeca?
Milk
production
– world
and EU
World
and EU
demand
Milk and
dairy
commodity
price
evolution
World milk price evolution
World dairy commodity prices
In summary:
•
Global demand has been mixed
•
SouthEast Asia, Mexico, Africa - good
•
stagnating global economic growth: weak commodity prices (oil prices),
declining capital and investment flows into developing and emerging
markets
+ Russian ban, China?
•
But there are positive signs.
•
Increasing world production starting with 2014, stocks?
•
Significant increases in domestic use of dairy products but not
for liquid milk
•
Depressing milk and dairy commodity prices and severe cash
flow difficulties for farmers
but dairy commodity prices recovering since June
What are
Copa and
Cogeca?
Milk
production
– world
and EU
World and
EU demand
Milk &
dairy
commodi
ty price
evolution
Copa &
Cogeca’s
requests
Copa and Cogeca requests
First package of measures (September 2015)
Farm income, cash flow:
•
advancing direct payments
•
ensuring the return of the super-levy back to the sector
•
keeping open the public intervention and PSA for butter and SMP
•
allowing the PSA for cheeses
•
reviewing the intervention price for butter and SMP
•
increasing the promotion budget
Copa and Cogeca requests
First package of measures (September 2015) –
cont’d
New market opportunities
• alternative markets + SPS and anti-dumping measures
•
Cover the risk with new markets, through credit export
insurance
Food chain
•
continuity of the milk package beyond 2020
•
define abusive practices at EU level
+ a comprehensive toolbox to cope with exreme market
volatility
Copa and Cogeca requests
Second package of measures (February 2016)
Farm income, cash flow:
•
Simple financial instruments (help farmers maintain their investments and
refinance their loans)
•
Reduce the cost of inputs by removing import duties, especially for
fertilisers, machinery, and other production factors
•
Grant flexibility with business plans in the second pillar, state aid, and
adjust the ceiling for de minimis aid
•
Promote flexible and dynamic risk management tools
•
Temporarily increase the intervention price for SMP and butter
Copa and Cogeca requests
Second package of measures (February 2016) –
cont’d
Trade issues
•
Re-open the Russian market
•
Accelerate negotiations with Japan, support TTIP (markets in
development, focusing on value-added products)
•
Credit export insurance and promotion
Food chain
•
Better functioning food chain (price transparency, preventing
delays in payment, curbing unfair trading practices)
•
Voluntary production initiatives: Article 222 of the single CMO
Copa and Cogeca requests
Third package of measures (July 2016)
The priority: farmers’ liquidity
A new package of measures to support the sector, using additional funds
without affecting the crisis reserve
New markets + export credit insurance/guarantees
In the near future
There is still need to tackle:
•
The open question of origin labelling for milk and dairy products
•
The reinforcement of the milk package (contract terms, collective
negotiation)
•
A toolbox to cope with market volatility
•
Unfair commercial practices
What are
Copa and
Cogeca?
Milk
productio
n – world
and EU
World and
EU
demand
Milk &
dairy price
evolution
Copa and
Cogeca’s
requests
Prospects
world
production
and demand
Medium-term prospects for world milk
production
Medium-term prospects for world dairy
demand
THANK YOU VERY MUCH!