Dairy farmers in Europe are heading towards “a significant cost shortfall” a leading lobby group, which represents 100,000 milk producers, has warned.
According to the European Milk Board (EMB) the significant decrease in producer prices in the dairy sector since the beginning of 2023 across Europe should not be seen as simply the “beginning of a market correction”.
It believes that farmers need legislation at European Union (EU) level to ensure that producer prices should be higher than production costs.
“This should apply to all farmers across the EU, including those who are members of cooperatives,” the organisation has stated.
The EMB, which has members in 16 European countries including Ireland, said last year was an “exceptional year” for some dairy farmers but historically the producer price does not match the cost of production.
Kjartan Poulsen, president of the EMB, has strongly advised against “downplaying” the effect of declining producer prices on the EU agricultural system.
Poulsen said: “When prices fall well below production costs, it’s not a market correction, but a total exploitation of our farmers and our food system.”
The lobby group has admonished the European Commission for showing “no signs” of taking the fall in producer prices seriously.
Milk production
The EMB has highlighted that in some countries such as Lithuania more than 10 per cent of producers have left the milk production sector.
Poulsen has queried whether the commission is really concerned that farmers are leaving dairy production.
The EMB believes it now time “to carefully study the market and to leverage all possibilities to prevent the growing significant market imbalance”.
It has suggested that one measure to address this imbalance could be the implementation of an EU-wide “voluntary production reduction” immediately.
The EMB has also advocated for the reform of the EU agricultural system towards a “socially-sustainable model” in the medium term.
“We need a system that ensures appropriate prices and income for farmers, so that they can continue to produce food and to build a secure and sovereign food system for EU citizens,” the lobby group has urged.
According to the latest European Commission short term dairy outlook the size of the overall, EU dairy herd could shrink by 1% in 2023.
It has also warned that a declining EU raw milk price is likely to lead to “increasing slaughterings” as feed and other input costs could remain high.