Milk cartons being transported on a conveyor belt in the Candia milk plant in Awoingt, northern France | Philippe Huguen/AFP via Getty Images
Europe’s hidden milk lake threatens fragile market

Brussels bought up a huge amount of milk to try to boost prices. The danger is that these stocks are now forcing prices down.

By Emmet Livingstone

1/29/18, 7:52 PM CET

Updated 2/1/18, 10:36 AM CET

HERSTAL, Belgium — Milk lakes and butter mountains were meant to be a relic of Europe’s past.

Massive EU intervention in the dairy market is back, however, and its price-distorting effects are coming in for some of the same scathing criticism as in the 1970s and 1980s, when Brussels became a byword for reckless intervention.

In an attempt to prop up prices in the teeth of a dairy crisis, Brussels has been buying up milk since 2015. A lot of milk. The European Commission has used public money to buy some 380,000 metric tons of skim milk powder. That’s slightly more than a big dairy powerhouse like France produced in 2016, for example.

Stockpiled in warehouses — mostly in France, Germany and Belgium — the sacks of milk powder conspicuously failed to stop the price hemorrhage. In fact, the EU strategy is in danger of doing exactly the opposite. Milk farmers and traders fear that the very existence of these quantities is already dragging down prices, in the expectation that they will one day be sold back.

“This powder is the problem,” said Romuald Schaber, chairman of the German dairy association. “It’s the sword of Damocles hanging over us all.”

https://www.politico.eu/article/europes-hidden-milk-price-lake-threatens-fragile-market-eu-commission/

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Dick, stop with the sloppy huge cut-and-paste entries. Learn to clean up the text and post a link, please. We only allow long articles pasted into the music section when we want to preserve the information. ---mudelf