French dairy farmers lose about 12p/litre on milk
French dairy farmers are losing up to 15 cents/kg (about 12p/litre) on milk, a report by the European Milk Board (EMB) has revealed.
The study showed the French cost of production ranged from 40-45 cents/kg (32-36p/litre) in 2013, but the average farmgate milk price was 33.8 cents/kg (26.2p/litre).
The EMB said the report, unveiled at this week’s Salon International de l’Agriculture in Paris, showed low milk prices were making the industry unprofitable and forcing farmers to leave.
See also: Top dairy farms keep cost of production down
The number of dairy farmers in the EU-25 fell from just under 900,000 in 2006-07 to 604,000 in 2011-12.
EMB president Romuald Schaber said a monitoring agency for the European milk market was now necessary, especially as milk quotas will be abolished in 2015.
“Due to too low milk prices, the French dairy sector loses all future perspectives,” he said. “Dairy farmers in France would need a price of 45 cents/kg (36p/litre) on average.
“If the EU does not want to jeopardise and lose the last remaining dairy farms, it has to take action. The setting up of a monitoring agency in the near future would be the right way to go.”
Romauld Schaber, EMB president
“If the EU does not want to jeopardise and lose the last remaining dairy farms, it has to take action. The setting up of a monitoring agency in the near future would be the right way to go.”
A study of Germany’s dairy industry showed the cost of production in 2012 ranged from 43-51 cents/kg (34-40.8p/litre), while the average farmgate milk price was 33 cents (26p/litre).
British dairy farms lost an average of -0.9p/litre in the difficult 2012-13 milk year, with a cost of production of 32.1p/litre, according to the DairyCo’s Milkbench+ report.
At the meeting of European farming ministers on 17 February the debate on the future of milk market management was split.
Ministers from southern European countries and France called for market monitoring tools to manage falling prices, while larger producers already pushing their quotas – the Netherlands, Austria, Ireland and Denmark – called for a reduction in the superlevy fine.
The UK’s position was that no new tools to control supply were needed.
NFU dairy board chairman Mansel Raymond told the NFU conference new forms of supply management were “totally against NFU policy and strategy going forward”.