Dairy Groups Warn EU Against Market-Distorting Aid Measures

A global group of dairy organizations urged the European Union to refrain from adopting support measures for its dairy industry that will “significantly” harm the global dairy market, according to a May 12 press release from the National Milk Producers Federation. The EU measures, which include private storage aid for the dairy sector, will allow those producers to temporarily withdraw their products from the market, would “artificially distort prices for an extended period and displace commercial competition,” the NMPF said. “Exporting large quantities of government-purchased [skim milk powder] and butter at below-market rates onto the world market will prolong the deeply challenging environment under which dairy sectors are operating worldwide,” the NMPF said.

In a statement, the dairy groups, including organizations from Brazil, Chile, Mexico and other Central and South American countries, said the measures would “unfairly” undercut international dairy prices. “The EU’s market-distorting practices are harmful enough during normal operations,” the groups said. “If used in the wake of the COVID-19 pandemic, which has dramatically eroded dairy prices, they would be disastrous to the world dairy market.”