13 November 2008 - Following the significant price increases for dairy products last year markets are now undergoing a severe correction.
Prices have decreased sharply and butter is quoted below or close to the intervention level in a number of Member States. Intervention buying-in is currently closed and will become available as from 1 March 2009 as laid down in the Council Single CMO Regulation.
In a falling market buyers are reluctant to enter into major contractual commitments, thereby fuelling further the downward trend. The general economic situation inside and outside the European Union, as well as financing problems, add to the fragility of the market situation.
However, the current lack of balance on the market is to some extent expected to be of a temporary nature. Under these circumstances the Commission intends to support the dairy market by granting an aid for private storage for butter.
The scheme will start on 1st January 2009 with butter produced in December 2008 also being eligible for aid.
Detailed rules for the scheme received a positive vote from Member States today in the Single Management Committee.
There will be a flat rate aid level of €15.62 per tonne, plus €0.44/tonne/day to cover variable costs for cold storage and financing.