Study shows EU intervention program wreaked havoc on global dairy prices
U.S. dairy groups call for end to EU dumping of dairy products in international markets.
An economic analysis published on June 18 shows the serious impact of the European Union’s (EU) skim milk powder (SMP) intervention program on the U.S. dairy industry — especially to U.S. farm-gate milk prices — in the years 2016-2019, according to the International Dairy Foods Association (IDFA), the U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF).
The report’s authors conclude that the United States was “economically harmed by the EU’s intervention program for SMP” in three ways. First, the EU program depressed the global price of SMP, the associations said, which lowered U.S. milk prices in 2018 and 2019, contributing to a $2.2 billion loss of U.S. dairy-farm income those years. The EU program also artificially inflated its global export market share, resulting in drastically lower market share for U.S. dairy exporters and other SMP exporters and U.S. dairy export losses of $168 million from 2018-2019. Finally, the analysis shows that when the EU unleashed its stockpile of “intervention SMP” onto the global marketplace, the disposal of the product had harmful effects on the competitiveness of the United States in historically important export markets, including Southeast Asia.