COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 28.05.1998 
COM(1998) 341 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
ON THE SYSTEM OF PUBLIC STORAGE OF SKIMMED MILK POWDER 

1. INTRODUCTION 
Under the price review agreed on 22 June 1995, the Council gave the green light to 
a change in the intervention arrangements for skimmed milk powder. That change is 
set out in Regulation (EC) No 1538/95 amending Regulation (EEC) No 804/68 on 
the common organisation of the market in milk and milk products. 
On its adoption, that Regulation was accompanied by a declaration in which the 
Council requested the Commission to present it, within two years, with a report on 
the application of the Regulation and its consequences for milk powder bought in. 
That report was to be accompanied, where appropriate, by suitable proposals 
relating in particular to a review of the lower limit of 31.4% in the light of progress 
made in adopting a Codex Alimentarius standard for skimmed milk powder and to 
the possible introduction of a higher buying-in price for skimmed milk powder with 
a protein content of over 37.7%. 
This document has been drafted in response to that request. 
2. THE LEGISLATION 
Article 7 of Regulation (EEC) No 804/68 provides in particular that the intervention 
agencies are to buy in skimmed milk powder with a minimum protein content of 
35.6% by weight of the non-fatty dry extract. 
However, skimmed milk powder with a protein content of 31.4% or more but less 
than 35.6% of the non-fatty dry extract is also bought in; in that case, the buying-in 
price is equal to the intervention price, less 1.75% for every percentage point the 
protein content is below 35,6 %. 
The detailed rules for applying public storage of skimmed milk powder are laid 
down in Regulation (EC) No 322/96. 
Lastly, Article 7 of Regulation (EEC) No 804/68 prohibits any manipulation of the 
protein content of skimmed milk powder offered for public intervention. 
3. EXPERIENCE WITH THE ARRANGEMENTS IN 1996 AND 1997 
The amended intervention arrangements have applied since 1 March 1996 with 
quantities bought in varying substantially during the first two years of application. 
In 1996, 123 586 tonnes were offered for intervention while that figure was 35 060 
tonnes in 1997, giving a total of 158 647 tonnes. 
That quantity breaks down by protein content as set out in the following table. 
Quantities of skimmed milk powder offered for public intervention in 1996 and 
1997 broken down by protein content 
less than 31.4% 
31.4 to 35.5% 
35.6 to 37.5% 
37.6 to 38.5% 
over 38.5% B 
0 
0 
1361 
2829 
402 
4592 D 
0 
0 
4316 
8512 
8847 
21675 F 
100 
4407 
14173 
4452 
1376 
24508 IRL 
0 
40 
20187 
25762 
10706 
56695 S 
0 
0 
621 
750 
1527 
2898 UK 
0 
0 
4431 
12978 
30869 
48279 EU 
100 
4447 
45089 
55284 
53727 
158647 
These figures show that: 
- the quantity rejected because the protein content was below the minimum of 
31.4% is negligible (0.06% of the total quantity offered); 
- the quantity of skimmed milk powder the buying-in price for which was reduced 
is very small (2.8% of the total quantity offered); 
- two thirds of the skimmed milk powder offered has a protein content of over 
37.5%. 
In addition, the figures given in the table faithfully reflect the average values 
observed for the protein content of raw milk in the Member States concerned. 
Lastly, the data forwarded by the Member Slates allow the impact on the budget of 
the provisions on the protein content of skimmed-milk powder offered for 
intervention to be assessed. The total value of skimmed milk powder bought in 
during 1996 and 1997 amounted to around to ECU 250 million (123 486 tonnes 
bought in at ECU 2 055.2/tonne). The reduction applied to the intervention price for 
the 4 447 tonnes with a protein content of less than 35.6% is around ECU 110 000, 
i.e. 0.4% of the total cost. However, were there a supplement for skimmed milk 
powder with a protein content of over 36.6%, the extra cost would have been around 
ECU 9.5 million. A higher price for a protein content of over 37.5% would have 
resulted in additional expenditure of around ECU 8.2 million. 
In fact, the application of the new intervention arrangements for skimmed milk 
powder has not caused significant difficulties or had adverse effects on the market. 
4. PROGRESS IN WORK ON THE CODEX ALIMENTARIUS 
At the meeting of the Codex Alimentarius Commission of July 1997, no progress 
was made in adopting a new standard for milk powder. The next meeting of that 
Commission will be held in June 1999 and the adoption of a new standard before 
that date must be ruled out. 
The proposed new standard introduces the principle of standardisation of milk 
powder protein involving the fixing of a minimum rate of 34% (m/m) of the non-
fatty dry extract. That rate of 34%, which must be interpreted as excluding products 
not meeting that criterion, should be compared with the minimum rate of 31.4% laid 
down for skimmed milk powder bought in. 
In this connection on 18 December 1997 the Council adopted Regulation (EC) No 
2597/97 laying down additional rules on the common organisation of the market in 
milk and milk products for drinking milk. In that Regulation, the Council confirmed 
the ban in principle on the standardisation of protein in drinking milk. Nevertheless, 
the Commission did undertake to consider the consequences for the standards 
adopted for milk products in connection with the Codex Alimentarius. 
5. CONCLUSIONS 
In view of the foregoing, there is no need to make changes to the public intervention 
arrangements for skimmed milk powder applying since 1 March 1996. In particular: 
• 
• as regards the Codex Alimentarius standard, no progress has been made to date 
and no decision can be taken before June 1999; 
the additional expenditure that a possible increase in the buying-in price for 
skimmed milk powder with a protein content in excess of 37.5% would incur and 
the resulting incentive for buying-in should be stressed. Accordingly, any such 
measure adopted should be accompanied by other measures to neutralise the 
effects, in particular on the budget. 

ISSN 0254-1475 
COM(98) 341 final 
DOCUMENTS 
EN 03 10 15 17 
Catalogue number : CB-CO-98-350-EN-C 
ISBN 92-78-36806-7 
Office for Official Publications of the European Communities 
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