No post-quota 'surge' in EU milk production expected in 2015: EC report


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No post-quota 'surge' in EU milk production expected in 2015: EC report

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Milk production in the European Union (EU) is not expected to surge in 2015, despite next month's abolition of the milk quota system, says a report.

In a recent report, the European Commission (EC) said "no surge in milk production is expected in 2015 over the 2014 record, despite the quota expiry in April."

The EU milk quota system, introduced in 1984 to address the problem of overproduction, is scheduled to be abolished on April 1 2015.

Each of the 28 EU Member States currently 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 of €27.83 (US$29.40) per 100kg.

Milk production is expected to increase significantly across the EU in the years following the removal of the quota system.

But in 2015, an increase of just 1% is expected, said the EC report.

"In 2015, the first year without quota, EU milk deliveries are expected to increase moderately, by around 1%,"​ said the EC report.

Higher supply increases are expected in Member States, including Ireland, the Netherlands, and Germany, where dairy cow numbers are up, it said.

“ is to be kept in mind that April and May correspond to the peak of the season and therefore deliveries significantly higher than the exceptional levels of 2014 are not very likely, also in view of the expected lag in recovery of farm gate milk prices," ​it added.

Record 2014 deliveries

EU dairy farmers delivered a record 148m tonnes of milk in 2014.

"While many expected an increase in EU milk deliveries in 2014, few anticipated the magnitude of this increase, estimated at 4.5% or more than 6m tonnes in one years,"​ the report continued.

"This equals the cumulative quantity increase in deliveries during the previous five years, which were the years during which quotas increased progressively by 1% annually."

Latvia, the UK, Poland, Hungary, Estonia, Luxembourg and Belgium each reported production increases of more than 6%.

Romania led the pack with a 13% increase in milk deliveries.

However, deliveries began to slow down towards the end of the year as dairy farmers across the EU sought to "limit surplus-levy bills in a context of decreasing milk prices."

A decrease in dairy commodity prices - attributable to falling Chinese demand and the Russian trade embargo - translated into lower EU milk prices in the second half of 2014.

Click HERE​ to read the full report.

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