EU plays down impact of quota abolition on dairy

Posted by Josette Dunn on 14th January 2011

The EU has issued data it claims will play down fears that the abolition of milk production quotas in 2015 could flood markets with cheap milk and drive some producers to the wall.In a food commodity forecast to 2020 released yesterday, (13 January), the Commission concludes said the end of quotas was projected to have a “limited impact on milk deliveries at the aggregate EU level”.

It said milk production should actually remain below the last 2015 quota cap, with production falls caused by the recent price crisis only being made up slowly. Brussels predicts 2020 milk production would be 153.9m tonnes, only 4% above 2009 levels and well below the final quota due in 2015.

Meanwhile, the EU cheese sector would continue to post strong growth, with output growing 10% between 2009 and 2020. EU demand would account for the bulk of this growth with exports remaining stable, predicted the Commission.

However, the stagnation in imports was blamed this partly on a strong Euro, and continuing falls in the currency could change future analyses.

In other sectors, Brussels predicts the EU will become a net poultry importer, with demand outstripping supply – by 2020 155,000 tonnes more poultry would be imported than exported, it claimed – but this also was partly predicated on a strong Euro.

Growth in production for other meats would remain sluggish at an average annual rate of 0.3%, said the Commission.

It added that global cereal markets would be tight over the next decade, increasing prices.

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