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Good Prospects for European Dairy Sector

20 March 2015

EU - The dairy sector will continue to set the pace for creating jobs, assuring growth, nurturing innovation and strengthening competitiveness in rural Europe and beyond.

This was the consensus from dairy farmers and politicians at the European Dairy Association ‘Dairy Policy for the 21st Century’ Conference in Brussels.

EDA President Michel Nalet (pictured) quoted EU Commissioner Phil Hogan in his conference opening remarks saying: “It is hard to find a sector with more promising prospects in the future than dairy.”

MEP Jim Nicholson, who is about to present a Dairy Report on prospects for the EU dairy sector to the European Parliament, joined the EDA President in underlining the importance of the dairy sector for the sustained development of European agriculture.

Mr Nicholson confirmed that the prospects for dairy are and remain favourable.

He also insisted on a further improvement of the Milk Market Observatory (MMO).

Tom Tynan, member of the cabinet of EU Commissioner Hogan, confirmed that the MMO will be enhanced to improved relevance.

While focusing on the need for further investments and the exploration of new markets, Mr Tynan added that Europe is ready for major expansion into the global markets based on its huge potential for milk and dairy production.

He also said that environmental legislation can have a major impact on the development and growth of the dairy supply chain.

The podium discussion, moderated by EDA Vice Chair Jais Valeur, focused on how to manage the development of the dairy farming and processing industry in the post-quota era.

Professor Holger Thiele from the University of Kiel in Germany launched the debate by not only stating the need for more competitiveness, but also by demanding for a moderate increase of the existing safety net.

He also pleaded for more risk management with the possibility of introducing a market-based insurance system in the long run.

Finally he said that Europe should foresee specific support for the dairy producers in specific (mountainous) areas.

MEP Eric Andrieu shared his view with the audience that increased price and cost volatility in the future will need to be managed.

According to M. Andrieu, enhanced market transparency will help all actors of the dairy sector in taking the right business decisions.

Dairy markets will need efficient tools in the future.

Any form of a supply management is the appropriate tool to balance out demand and supply and to limit volatility.

Commenting on the contributions of both Professor Thiele and MEP Andrieu, Mr Jens Schaps, Director at DG Agri, said that the US model for milk margin insurance would not be an option for Europe as the margins guaranteed in the US are usually way too high.

He also confirmed that the medium and long-term prospects for the EU dairy sector are profoundly favourable.

The dairy markets will be driven by an increasing global demand, especially from Asia and Africa.

The EU Commission is focusing on support for broader market access in third countries for EU dairy products.

“The end of the quota regime is a huge progress in terms of CAP simplification – one of the core requests of all agricultural stakeholders and politicians,” said EDA Vice Chair Jais Valeur.

The dairy industry is not a follower of market developments, but rather an anticipator and mover in the international context.

He also said that the dairy industry can be confident in the dairy dynamics for the future.

TheCattleSite News Desk

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