EU SMP stock release: what might happen?

The European Commission has opened the sales by a tendering procedure of skimmed milk powder (SMP) out of public intervention stocks. The first partial invitation to tender shall end tomorrow, on 13 December 2016. Regulation, from the Official Journal of the European Union, is reported at the bottom of the article. - EU-28: SMP intervention stock – EU-28: SMP intervention stock

The first amount released is the SMP entered into storage before 1 November 2015, that is 22.150 t of SMP [refer to the October data in the chart], which corresponds to 6.28% of the total amount of SMP stored as of October 2016.

At international level, the dairy sector is following this procedure and expects the impact on the market. At the moment, there have been no adverse effects, and the SMP price at the GDT auction increased, also after the European Commission decision to sell part of the stocks. After all, starting from June the EU milk deliveries were lower than 2015, and the amount of SMP released by the European Commission may to some extent compensate for the lower SMP production due to the reduction of milk supply.

In the regulation on the tenders opening procedure, the European Commission states that: “Given the current situation on the skimmed milk powder market in terms of price recovery and the high level of intervention stocks it is appropriate to open the sale of skimmed milk powder from public intervention by a tendering procedure“. However, the guests from New Zealand at the CLAL Dairy Forum (October 2016) have clearly expressed their doubts about the subsidies and intervention of the EU policy, declaring that this process could lead to market distortions and can be destructive to the whole sector.

The following video provides a brief summary of the different points of view of Francis Reid (Fonterra, New Zealand), Kimberly Crewther (DCANZ, New Zealand), H S Oberoi (Parag Milk Foods Ltd, India) and the response of Carlos Martín Ovilo from the European Commission.


COMMISSION IMPLEMENTING REGULATION (EU) 2016/2080 of 25 November 2016 opening the sale of skimmed milk powder by a tendering procedure
Commission-implementing-regulation-EU_2016_2080.pdf (316 kB)
COMMISSION IMPLEMENTING REGULATION (EU) 2016/2080 of 25 November 2016 opening the sale of skimmed milk powder by a tendering procedure

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The team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.

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  1. […] Une vidéo du CLAL présente brièvement les différents points de vue de Francis Reid (Fonterra, Nouvelle-Zélande), Kimberly Crewther (DCANZ, Nouvelle-Zélande), HS Oberoi (Parag Milk Foods Ltd, Inde) et de la réponse de Carlos Martín Ovilo de la Commission européenne.  […]

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