EU Commission Launches Milk Market Observatory

17 Apr 2014 --- A new European Milk Market Observatory is being launched today by European Commissioner for Agriculture and Rural Development Dacian Ciolos. In light of the end of the milk quota regime on 31 March 2015, the Observatory will strengthen the Commission’s capacity to monitor the dairy market and help the sector adapt to the new environment, after some 30 years under a quota regime.

The Observatory is aimed at increasing transparency and providing the most accurate market data, so that actors of the milk supply chain can take well-informed business decisions and the Commission can make well-informed policy decisions. Starting from its launch this afternoon (4pm), the European Milk Market Observatory will provide a single web interface with a wealth of raw data for stakeholders in the milk sector. Moreover, it will follow and analyse past and present trends in EU and world dairy markets, production, balance between supply and demand, productions costs, markets perspectives etc.

Commissioner Ciolos said: "The new CAP strengthens the role of stakeholders in ensuring a balanced development of the milk sector. For them to be able to do so, we need both transparency of data and an accurate analysis of the market. The Observatory's true added value will lie in the constructive assessment of different market analyses. It will be a crucial tool for decision-making by the Commission and Member States".

Following on from the concept first floated by Commissioner Ciolo? at the Dairy Conference in September 2013, the Observatory will provide data transparency, complemented by market analysis, short-term outlook reports and medium-term prospects, as well as by regular meetings of an economic board. This board composed of milk market stakeholders will discuss the data and add valuable relevant information and insight that is not readily available from statistics. The Milk Market Observatory meetings will be reflected in reports that will also be made publically available.

The abolition of the milk quota system in 2015, agreed in the 2008 “CAP Health Check”, will create a new context for economic operators who have been dealing with milk quotas since their introduction in 1984. To prepare the sector for this new operating environment, a series of new instruments were developed in the context of the 2012 'Milk Package', notably on cooperation among dairy farmers. Moreover, the milk sector was the subject of intense discussions during last year’s CAP reform negotiations and the final agreement (MEMO/13/621) provides greater market orientation with a reinforced safety net for farmers in the context of external uncertainties – primarily through direct payments, but also with options for risk management under Rural Development programmes and a new, flexible market crisis reserve in case of market difficulties.