EU Intervention Stocks

Published 14 August 17

Intervention

Intervention 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.

It aims to provide a minimum floor in the market during times of low pricing. After the volume limit is reached, product can then only be offered into intervention through a tendering process, rather than at the set prices.

There have been no offers of SMP into public intervention since the week of 15 May, keeping the total tonnage placed into intervention since 1 March at 7,937 tonnes.

 

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:
02-Jan to 20-Mar 0 0
27-Mar 0 472
03-Apr 0 1,201
10-Apr 0 2,669
17-Apr 0 3,680
24-Apr 0 4,565
1-May 1,132 6,554
8-May 0 7,365
15-May 30 7,937

 Source: MMO

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

The European Commission began to offer SMP intervention stock up for sale from December 2016, via a tendering process.

Of the elevent tenders for the sale of intervention stocks to date, only 2 have been successful, accounting for 140 tonnes of product. No product was sold at the most recent tender on 18 July. The next tender is on 19 September 2017.

 Tender date  Volume sold (tonnes) Price (€/tonne) Volume available for next tender (tonnes)
 13-Dec-16  40  2,151 21,962 
 03-Jan-17  0  - 21,962 
 17-Jan-17  0  - 21,962 
07-Feb-17  0  - 21,962
21-Feb-17  0  - 21,962
07-Mar-17 0 - 21,962
21-Mar-17 0 - 21,962
18-Apr-17 0 - 21,962
16-May-17 0 - 21,962
20-Jun-17 100 1,850 21,862
18-Jul-17 0 - 21,862

Source: MMO

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

The 2015 intervention scheme was extended by three months in light of ongoing market difficulties, to run until 31 December 2015. A new scheme then immediately opened on 1 January 2016 with the volume limits reset, due to remain open until 30 September 2016. The European Commission extended this scheme for SMP, keeping it open until 31 December 2016. It then opened a new 2017 scheme for SMP, which will be available from 1 January - 30 September 2017.

SMP volumes reached the original ceiling on 31 March 2016 and SMP offers between 1 April and 19 April were subject to tendering. From 20 April, the European Commission officially raised the volume ceilings for the 2016 campaign, due to ongoing market difficulties. The new limits allowed a total of 100,000 tonnes of butter and 218,000 tonnes of SMP to enter at fixed prices.  

On 24 May 2016, the new 218k tonne volume ceiling was reached for SMP, and offers became subject to a tendering procedure once again. The ceiling for SMP was then raised to 350,000 tonnes for 2016 and buying-in resumed at the fixed price. 

No butter has been offered into intervention in 2015-17.

PSA

In June, 9,270 tonnes of SMP were removed from PSA (the scheme is closed to new additions), predominately from Germany and the Netherlands. 135 tonnes remain of the UK stocks.  Of the remaining butter stocks, 1,142 tonnes were removed (from France), leaving only 227 tonnes in PSA stocks by the end of June. PSA cheese stocks remain untouched.

 PSA stock movement (tonnes)*
 Jun-17
    Butter SMP Cheese
UK in 0 0 0
  out 0 0 0
  balance 0 135 0
EU in 0 0 0
  out 1,142 9,270 0
  balance 227 28,348 10,865

 Source: MMO

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

 

PSA stocks

 

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. 

Additional PSA schemes for SMP and cheese were agreed last year as part of the Aid Package agreed by the Commission on 7 September 2015. The new SMP scheme allows manufacturers to store product for one year and pays a higher rate of aid. For cheese, the new scheme allowed for up to 100,000 tonnes of cheese to be put into storage at subsidised rates, distributed among Member States according to cheese production levels. This was after the initial cheese PSA scheme was repealed on 23 September 2014 due to a disproportionate surge in offers from cheese producing countries not traditionally exporting significant quantities of cheese to Russia.