Report from the Commission to the Council on the system of public storage of skimmed milk powder
Date: 1998-05-28
Institutions: European Commission
Subjects: intervention buying, intervention stock, milk protein, public stock, skimmed milk powder

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% 

B 

0 

0 

D 

0 

0 

F 

IRL 

100 

0 

4407 

40 

S 

0 

0 

UK 

EU 

0 

0 

100 

4447 

35.6 to 37.5% 

1361 

4316 

14173 

20187 

621 

4431 

45089 

37.6 to 38.5% 

2829 

8512 

4452 

25762 

750 

12978 

55284 

over 38.5% 

402 

8847 

1376 

10706 

1527 

30869 

53727 

4592 

21675 

24508 

56695 

2898 

48279 

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 

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Catalogue  number  :  CB-CO-98-350-EN-C 

ISBN  92-78-36806-7 

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