The NFU has urged the rest of Europe to act “responsibly and collectively” once milk quotas end on 1 April 2015.
NFU dairy board chairman Rob Harrison said other member states must make sure they look at the market opportunities for any extra milk before they increase production.
Mr Harrison said it was difficult to predict what will happen once quotas are abolished.
“Farmers and dairy processors here do have some concerns about how other EU countries will react to the ending of quotas,” he said.
“Some are rapidly increasing their output without an end market for these goods. With milk prices yet to show any strong signs of recovery, this could push farmgate milk prices down further in the EU, and stall any recovery in the dairy markets. It’s vital that expansion in any member state is planned in accordance with available market opportunities.”
Mr Harrison said tough challenges did lie ahead, especially with prices, but the long-term outlook was good.
“However, the next government and the EU must do more to ensure a sustainable future for the dairy sector and help make tools available for farmers to manage volatility. We also need UK dairy processors to recognise and promote potential markets both at home and abroad and look to develop new products such as sports drinks.”
Milk quotas were first introduced across Europe in 1984 at a time when production of milk far exceeded demand.
Speaking last week, EU farm commissioner Phil Hogan described their end as both a challenge and an opportunity.
“It is a challenge because an entire generation of dairy farmers will have to live under completely new circumstances, and volatility will surely accompany them along the road,” he warned.
“But it is certainly an opportunity in terms of growth and jobs. Through increased focus on valued-added products as well as on ingredients for ‘functional’ food, the dairy sector has the potential of being an economic driver for the EU.”
According to latest figures from Brussels, even with quotas, EU dairy exports have increased by 45% in volume and 95% in value in the past five years.