By Farmers Weekly staff

BRITAIN has slumped to bottom of the EU milk price league, following three years of declining returns.

Latest figures from German statistics agency ZMP put the average value throughout Europe in 1998 at Euro2.99/kg (20.82ppl) – a slight increase on the previous years returns. But UK producer prices are quoted at Euro2.68/kg (18.64ppl) – a drop of 10% year on year.

A combination of declining market prices, the strong Pound and weaker farmer selling are blamed for the demise in the UK, which has reached the bottom of the Euro-league for the first time in 10 years.

But dairy farmers in other member states are now suffering too, says Erhardt Richarts of ZMP. “Prices are down in almost all countries so far this year. Butter and skimmed milk powder are now selling into intervention in France, Germany and the Netherlands, and cheese and UHT milk prices are also lower.”

The loss of export sales to Russia is seen as the main reason for the depressed markets.

“As usual, it is the minority part of the dairy market that sets the tone for the whole,” says Mr Richarts.

“What used to go to Russia is now going into intervention. It seems clear that milk prices will be 5% down in Germany this year.”

  • US dairy farmers have started to apply this week to a new “dairy income loss assistance programme,” designed to compensate them for lower milk prices.
  • Washington estimates that all milk producers should be entitled to aid worth about $0.2/cwt (0.24ppl), up to a maximum $5000 (£3105) a holding.