EU Intervention Stocks

Published 28 March 18

Intervention

Due to the current high stock levels, the Commission have implemented a temporary change to the fixed buying-in price for SMP, reducing it to zero for the 2018 window (1 March - 30 September). The effect of this change is it allows the Commission to limit (or avoid) any further stock accumulation. 

Typically, the Intervention scheme allows the European Commission to buy in 60,000 tonnes of butter and 109,000 tonnes of SMP between 1 March and 30 September each year, at set prices of €2,217/tonne and €1,698/tonne respectively.

The aim of the policy is to provide a minimum floor in the market during times of low pricing. After the volume limit is reached, product can be offered into intervention through a tendering process if proposed by the Commission. 

SMP offered into public intervention (tonnes)*

cumulative total

  UK EU
2015 total 1,048

40,280

2016 total
(fixed price and tender)
5,270  334,551
2017 total  1,818

30,647

CURRENT STOCKS
(to end Feb 18)
7,732 375,701

 *Totals may not match MMO figures due to rounding. Please note these figures are subject to revisions. Source: MMO

Intervention Sales

The European Commission began to offer SMP intervention stock up for sale from December 2016, via a tendering process. Stocks entered into intervention up to 1 November 2015 were initially available to purchase through the tender process, amounting to 21,780 tonnes.

Available SMP intervention stocks were increased in January 2018 to include all stocks up to 1st April 2016, totalling 100,980 tonnes. 

According to the most recent tender on 20 March, offers were made for the purchase of 37,712 tonnes, although only 4,127 tonnes was sold at a minimum price of €1,105/tonne. 

Of the 18 tenders for the sale of intervention stocks to date, 7 have been successful, accounting for 10,248 tonnes of product, leaving 90,952 tonnes available for the next tender.

 Tender date  Volume sold (tonnes) Price (€/tonne) Volume available for next tender (tonnes)
21-Feb-17  0  - 21,740
07-Mar-17 0 - 21,740
21-Mar-17 0 - 21,740
18-Apr-17 0 - 21,740
16-May-17 0 - 21,740
20-Jun-17 100 1,850 21,640
18-Jul-17 0 - 21,640
19-Sep-17 0 - 21,640
17-Oct-17 40 1,441 21,600
21-Nov-17 40 1,390 21,560
11-Dec-17 0 - 21,560
15-Jan-18 1,864 1,190

99,116

20-Feb-18 4,337 1,100

95,079

20-Mar-18 4,127 1,105

90,952

Source: MMO

*Totals may not match MMO figures due to rounding. Please note these figures are subject to revisions.

PSA

 

The European Commission re-opened Private Storage Aid (PSA) on 5 September 2014 in response to the threat of market disruption due to the loss of the Russian export market. PSA is a payment made by the European Commission to processors in return for keeping products in storage and off the market for an agreed period of time. The scheme covers butter, SMP and cheese.  

PSA was extended to remain open until 30 September 2016, due to ongoing market difficulties.The butter and cheese schemes closed on this date but PSA for SMP was extended further and closed on 28 February 2017. 

In February, 528 tonnes of SMP were removed from PSA from Germany and the Czech Republic.  Belgium, the Netherlands and the UK are the only countries to still have PSA stocks.  Cheese and butter stocks in private storage are now at zero.

 PSA stock movement (tonnes)*
 Feb-18
    Butter SMP Cheese
UK in 0 135 0
  out 0 0 0
  balance 0 135 0
EU in 0 1,772 0
  out 0 528 0
  balance  0  1,244 0

 Source: MMO

*Totals may not match MMO figures due to rounding. Please note these figures are subject to revisions.
**Stock levels for cheese in PSA were revised by the Commission, indicating that these had been removed by April 2017 (the maximum storage period subject to aid was 210 days)