German milk price does still not cover production costs
According to the new results of the study on production costs, the cost of production in Germany in January 2014 amounted to 45.16 ct/kg. With a milk price of 41.46 ct/kg, these new results reveal a shortfall of about 4c/L.
Costs are particularly high in the South Region (Saarland, Bavaria, Baden-Württemberg, Rhineland-Palatinate, Hesse), with 50.20 ct/kg. For the East Region (Thuringia, Saxony, Saxony-Anhalt, Brandenburg, Mecklenburg-Vorpommern) the study commissioned by both the European Milk Board (EMB) and the MEG Milch Board reveals a cost of 43.26 ct/kg. In the North (North Rhine-Westphalia, Lower Saxony, Schleswig-Holstein) milk production costs in January 2014 amounted to 39.98 ct/kg milk.
The study was carried out by the German office BAL (Büro für Agrarsoziologie & Landwirtschaft). The price/cost ratio calculated for Germany by the MEG Milch Board revealed that in January 2014 costs were covered by 92%, which corresponds to a deficit of 8%. For Romuald Schaber, EMB President, this chronicle shortfall between producer prices and production costs represents a major problem: “Unfortunately, one of the logical consequences of this deficit situation is that an increasing number of dairy farmers have no other choice than to put an end to production.”
In Germany, as well as in the whole of the EU this not only leads to the closure of single farms – and the loss of the according know-how – but also to the disappearance of milk production from entire regions. “This will result in the EU’s inability to produce enough healthy food within its borders. In order to preserve the EU’s food sovereignty in the future, we have to take action now, for example by putting in place a Monitoring Agency for the dairy sector,” continues Schaber. This agency should not only monitor the market, but also play an active role in adapting milk supply to demand, he said. This would guarantee a price which would allow producers to cover their cost of production and avoid chronicle deficits which are harmful to production.