Editorial | IDM There’s light at the end of the tunnel But it will take some time before one can feel the market recovery Roland Sossna Editor IDM International Dairy Magazine sossna@blmedien.de international-dairy.com How will it go on? Milk supply in Europe is still on the up with many a farmer not even having started to think about reducing his herd’s output. The intervention price is, sadly once again, determining the effective bottom of milk utilisation. What would happen to markets, milk prices and dairy farmers’s economic situation if the EU would have given up its intervention concept during one of the many market reforms in recent years? One doesn’t need much imagination 4-5 2016 | international-dairy.com · 3 to envisage a massive exodus of farmers from dairying. But on the other hand one could say that intervention is just prolonging any market crisis. Would the state, in this case the EU, just let markets develop as they are set to develop, maybe phases of low and extra-low prices would be much shorter as signals come faster across the sector. This might make life for milk suppliers easier in the end as they may expect a return to a ‘normal‘ state of market sooner than now when the serious downturn has been here for much more than a year. Anyway, analysts already believe to see the light at the end of the tunnel. By the turn of the year, most economists expect a slow recovery of the commodity prices in the world market. This is good news but everyone knows that increasing prices take still a long time until one can recognise them in the monthly milk supply bill. It is fair to assume that we all will be very much into the year 2017 before the milk prices start to climb again. But it is questionable whether the sector will return to 2013 price levels in the foreseeable future. There are hints that 2013 may have marked the all-time high for this decade when we talk about milk prices, now that developing countries as well as those who supply crude oil are running out of money, thinks Roland Sossna.
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