Effects of selling public intervention stocks of skimmed milk powder

Jongeneel, Roel; Silvis, Huib; Verhoog, David; Daatselaar, Co


At the request of the Dutch Ministry of Agriculture, Nature and Food Quality, this report analyses the potential market impacts and budgetary effects of different strategies of selling EU public intervention stocks of skimmed milk powder
(SMP). A gradual phasing out of the EU's SMP stocks over a two-year period is likely to have a negative impact on the EU’s SMP prices. The use of alternative market outlets reduces the negative price impacts on the regular SMP market, but implies that a significant loss in sales value of SMP stocks has to be accepted. When the stocked SMP ages, at a certain moment there may be no other option than the use of alternative channels to destock and an increasing budget expenditure will then be unavoidable.