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EU public intervention open but PSA still closed
Monday, 6 April 2020
by Kat Jack
EU public intervention for butter and skimmed milk powder (SMP) opened last month, and will be open for its usual period of 1 March to 30 September in 2020. As this is within the transition period of Brexit, the UK is still eligible to use intervention.
EU public intervention supports the market by adding a floor to it. When intervention is open, the EU will buy-in product at a fixed price: €2217.50/t for butter and €1,698.00/t for SMP (£1,984/t and £1,519/t respectively by March exchange rates). This is limited to a maximum of 50,000t butter and 109,000t SMP. Beyond those limits, buying-in takes place by tender.
Up until now, market prices have been above intervention prices and so no product has been offered into intervention, as of the start of April. In terms of market returns, our latest official AMPE (actual milk price equivalent, the return on turning milk into butter and SMP), was at 28.5ppl for March 2020, however, there is a lot of market uncertainty due to the coronavirus pandemic and reports of market prices falling quickly. For comparison, the intervention milk price equivalent (IMPE) for the same products was just 19.3ppl.
Private storage aid still closed
At the moment the EU has not made private storage aid available. However, if the decision was made to open it, the UK would be able to take part in the scheme up until 15 October 2020.
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