dairy

Brighter 2002 ahead for skim milk powder exporters UK and other EU producers are looking forward to a brighter trading situation in 2002 than they have enjoyed over the past year. This is partly because the European Commission decided just before Christmas to double the export subsidy for skim milk powder from 100 to 200 euros per tonne ­ about £125 per tonne. Export subsidies for whole milk powder were also raised by 13% to 680 euros per tonne. EU exports of skim milk powder in the year just ended collapsed 60% to less than 150,000t, partly because the export subsidy was reduced to zero from July to November. The increased export subsidy will help make EU supplies more competitive on the world market, although many experts believe even higher subsidies will soon prove necessary. Another positive step is that users of skim powder for animal feed, normally a large market on the continent, can only claim a user's subsidy from January 1 if they use at least 50% of skim powder in their compounds. During 2001 this minimum incorporation rate' was dropped to 25%, and this was partly responsible for a drop of 35% in the use of skim during the year as compounders switched to cheaper whey powder. Skim powder producers are also looking forward to the seasonal opening of intervention buying from March 1, which will allow production from February onwards to be sold at the official support price of 2055 euros (about £1,280) per tonne. Market prices across the EU dropped below this support level in November and December, but it is expected that prices will now start firming as the date for intervention buying comes closer and as the new measures increase demand for export and for animal feed use. {{CANNED GOODS }}