Milk quota abolition will leave GDT auction more 'attractive' to dairies

By Mark ASTLEY contact

- Last updated on GMT

Milk quota abolition will leave GDT more 'attractive' to dairies

Related tags: Eu milk quota, Milk

 GlobalDairyTrade (GDT) will become more "attractive" to dairies as a result of the European Union (EU) milk quota abolition in 2015 , the auction platform believes.

The EU milk quota system, introduced in 1984 to address the problem of overproduction, is scheduled to be abolished in April 2015.

Under the system, each of the 28 EU Member States has two quotas - one for deliveries to processors and the other for direct sales at farm level. Member States that exceed either quota are issued a fine called a superlevy.

Milk production, and as a consequence processing, in the EU is expected to rise significantly in the years following the quota removal.

GDT expects interest in its auction platform to grow in line with this increase.

In a statement accompanying its quarterly report for the final three months of 2014, Paul Grave, director, GDT, said the platform has a critical role in play.

“As milk production continues to grow in Europe next year, we anticipate that dairy companies will see GDT as an attractive online sales channel that compliments their existing traditional sales methods and discovers prices through a competitive global marketplace,”​ said Grave.

GDT, established in 2008 by New Zealand dairy giant Fonterra, is an auction platform for internationally traded commodity dairy products, including anhydrous milk fat, butter, cheddar, lactose, skim milk powder (SMP), sweet whey powder, and whole milk powder (WMP).

Alongside Fonterra, Amul (India), Arla Foods (Denmark), DairyAmerica (US), Euroserum  (France), Land O'Lakes (US), Murray Goulburn (Australia), and Molkerei Ammerland (Germany) currently sell on the GDT platform.

In Q4, dairy prices on the GDT auction platform fell at a slower rate than Q3.

Between October and December, the GDT Price Index, a weighted average of the percentage changes in prices, fell by 1% - up from a 22% decline between July and September.

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