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Dairy market and EU policy developments

Explore the impact of Copa and Cogeca on dairy cooperatives, world milk production, market trends, and EU policy measures for farm income support and trade issues.

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Dairy market and EU policy developments

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  1. Dairy market and EU policy developments Mansel RAYMOND, Chairman of Copa and Cogeca Working Party on Milk and Dairy Products| Marketing dairy cooperatives, 27.09.2016, Chodov, Czech Republic

  2. Outline

  3. What are Copa and Cogeca?

  4. What are Copa and Cogeca? – cont’d

  5. Dairy cooperatives • 58% of the market share at EU level • add value to their members and members’ product • an important link in the milk supply chain • ensure market access for their members • add vitality to the local economy and environment, including in areas facing natural handicaps. • help their members coping with market volatility and provide a better price on the condition that they have a large market share in a particular country.

  6. World milk production Source: DG AGRI

  7. EU milk production Source: DG AGRI

  8. World demand Source: DG AGRI

  9. World and EU exports Source: DG AGRI

  10. Sales of dairy products at retail level in the EU Source: DG AGRI

  11. World milk price evolution

  12. World dairy commodity prices

  13. In summary: • Global demand has been mixed • SouthEast Asia, Mexico, Africa - good • stagnating global economicgrowth: weakcommodityprices (oilprices), declining capital and investment flows into developing and emerging markets + Russian ban, China? • But there are positive signs. • Increasing world production startingwith 2014, stocks? • Significantincreases in domestic use of dairyproducts but not for liquidmilk • Depressingmilk and dairycommodityprices and severe cash flow difficulties for farmers • but dairycommoditypricesrecoveringsinceJune

  14. Copa and Cogeca requestsFirst package of measures (September 2015) • Farmincome, cash flow: • advancing direct payments • ensuring the return of the super-levy back to the sector • keeping open the public intervention and PSA for butter and SMP • allowing the PSA for cheeses • reviewing the intervention price for butter and SMP • increasing the promotion budget

  15. Copa and Cogeca requestsFirst package of measures (September 2015) – cont’d • New marketopportunities • alternative markets + SPS and anti-dumping measures • Cover the riskwith new markets, throughcredit export insurance • Food chain • continuity of the milk package beyond 2020 • define abusive practices at EU level • + a comprehensivetoolbox to copewithexrememarketvolatility

  16. Copa and Cogeca requests Second package of measures (February 2016) • Farm income, cash flow: • Simple financial instruments (help farmers maintain their investments and refinance their loans) • Reduce the cost of inputs by removing import duties, especially for fertilisers, machinery, and other production factors • Grant flexibility with business plans in the second pillar, state aid, and adjust the ceiling for de minimis aid • Promote flexible and dynamic risk management tools • Temporarily increase the intervention price for SMP and butter

  17. Copa and Cogeca requests Second package of measures (February 2016) – cont’d • Trade issues • Re-open the Russian market • Accelerate negotiations with Japan, support TTIP (markets in development, focusing on value-added products) • Credit export insurance and promotion • Food chain • Better functioning food chain (price transparency, preventing delays in payment, curbing unfair trading practices) • Voluntary production initiatives: Article 222 of the single CMO

  18. Copa and Cogeca requests Third package of measures (July 2016) • The priority: farmers’ liquidity • A new package of measures to support the sector, using additional funds without affecting the crisis reserve • New markets + export credit insurance/guarantees

  19. In the near future • There isstillneed to tackle: • The open question of origin labelling for milk and dairyproducts • The reinforcement of the milk package (contractterms, collective negotiation) • A toolbox to copewithmarketvolatility • Unfair commercial practices

  20. Medium-term prospects for world milk production

  21. Medium-term prospects for world dairy demand

  22. THANK YOU VERY MUCH!

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