Dairy market and EU policy developments Mansel RAYMOND, Chairman of Copa and Cogeca Working Party on Milk and Dairy Products| Marketing dairy cooperatives, 27.09.2016, Chodov, Czech Republic

Outline What are Copa and Cogeca? Milk production – world and EU World and EU demand and exports Milk and dairy commodities price evolution Copa & Cogeca’s requests Prospects world production and demand

What are Copa and Cogeca?

What are Copa and Cogeca? Fighting for a sustainable, innovative and competitive agriculture COGECA 1959 22,000 European agricultural cooperatives COPA 1958 23 million European farmers and family members

What are Copa and Cogeca? – cont’d

Dairy cooperatives 58% of the market share at EU level add value to their members and members’ product an important link in the milk supply chain ensure market access for their members add vitality to the local economy and environment, including in areas facing natural handicaps. help their members coping with market volatility and provide a better price on the condition that they have a large market share in a particular country.

Milk production – world and EU What are Copa and Cogeca? Milk production – world and EU

World milk production Source: DG AGRI

EU milk production Source: DG AGRI

World and EU demand Milk production – world and EU What are Copa and Cogeca? Milk production – world and EU World and EU demand

World demand Source: DG AGRI

World and EU exports Source: DG AGRI

Sales of dairy products at retail level in the EU Source: DG AGRI

Milk and dairy commodity What are Copa & Cogeca? Milk production – world and EU World and EU demand Milk and dairy commodity price evolution

World milk price evolution

World dairy commodity prices

In summary: Global demand has been mixed SouthEast Asia, Mexico, Africa - good stagnating global economic growth: weak commodity prices (oil prices), declining capital and investment flows into developing and emerging markets + Russian ban, China? But there are positive signs. Increasing world production starting with 2014, stocks? Significant increases in domestic use of dairy products but not for liquid milk Depressing milk and dairy commodity prices and severe cash flow difficulties for farmers but dairy commodity prices recovering since June

Copa & Cogeca’s requests What are Copa and Cogeca? Milk production – world and EU World and EU demand Milk & dairy commodity price evolution Copa & Cogeca’s requests

Copa and Cogeca requests First package of measures (September 2015) Farm income, cash flow: advancing direct payments ensuring the return of the super-levy back to the sector keeping open the public intervention and PSA for butter and SMP allowing the PSA for cheeses reviewing the intervention price for butter and SMP increasing the promotion budget

Copa and Cogeca requests First package of measures (September 2015) – cont’d New market opportunities alternative markets + SPS and anti-dumping measures Cover the risk with new markets, through credit export insurance Food chain continuity of the milk package beyond 2020 define abusive practices at EU level + a comprehensive toolbox to cope with exreme market volatility

Copa and Cogeca requests Second package of measures (February 2016) Farm income, cash flow: Simple financial instruments (help farmers maintain their investments and refinance their loans) Reduce the cost of inputs by removing import duties, especially for fertilisers, machinery, and other production factors Grant flexibility with business plans in the second pillar, state aid, and adjust the ceiling for de minimis aid Promote flexible and dynamic risk management tools Temporarily increase the intervention price for SMP and butter

Copa and Cogeca requests Second package of measures (February 2016) – cont’d Trade issues Re-open the Russian market Accelerate negotiations with Japan, support TTIP (markets in development, focusing on value-added products) Credit export insurance and promotion Food chain Better functioning food chain (price transparency, preventing delays in payment, curbing unfair trading practices) Voluntary production initiatives: Article 222 of the single CMO

Copa and Cogeca requests Third package of measures (July 2016) The priority: farmers’ liquidity A new package of measures to support the sector, using additional funds without affecting the crisis reserve New markets + export credit insurance/guarantees

In the near future There is still need to tackle: The open question of origin labelling for milk and dairy products The reinforcement of the milk package (contract terms, collective negotiation) A toolbox to cope with market volatility Unfair commercial practices

Prospects world production and demand What are Copa and Cogeca? Milk production – world and EU World and EU demand Milk & dairy price evolution Copa and Cogeca’s requests Prospects world production and demand

Medium-term prospects for world milk production

Medium-term prospects for world dairy demand

THANK YOU VERY MUCH!