EU slices through butter mountain

Around 6,000 tonnes of butter held in Spain, Czech Republic and Finland will be sold off at a minimum price of €243.05 per 100kg, member states agreed at Thursday's Milk Management Committee meeting. The move again shows a more favourable market dynamic for Europe's dairy producers. Dairy commodity prices have risen on the world market in recent months due to a tightening of supplies, made more acute by the recent drought in Australia. The emptying of butter intervention stocks in the EU represents a significant turnaround in the bloc. It has had intervention stocks of butter since 1964, and at their height (1986) stocks totalled 1.283m tonnes. Last year, talk of an EU butter 'mountain' was renewed last summer after a supply glut knocked prices and left intervention stores almost full. The European Commission said butter production would simply have to fall going forward. It predicted there would be 200,000 tonnes less butter around by 2011, reflecting an expected decline in consumption. The Commission recently proposed a set intervention scheme for butter that would automatically run from March to August every year, offering producers more stability. The move was welcomed by the European Dairy Association.