What farmers in other countries get paid for milk

The dairy crisis is hurting farmers across the world, as production far outstrips any rising demand.

Farmers Weekly looks at the farmgate prices and milk production levels around the world and considers how milk producers are coping in different countries.

See a snapshot of farmgate prices in the graphic and read the detail for each country below.

See also: How UK dairy producers can compete globally


The UK’s strength is a big liquid market — but that means dairy farmers are divided.

The average milk price of 23.13p/litre in January hides a great split.

Supermarket liquid pools might be paying more than 30p/litre, but some farmers’ “A” prices are down to 17-18p/litre, with “B” rates even lower.

Less than one-fifth of dairy farmers are on cost-of-production-linked deals. Mechanisms to rein in producers, such as “A” and B” contracts, have not pulled output below last year’s levels.

But a long period below 20p/litre could force many to cut back dramatically — or quit.



World market weakness means milk prices are falling in the USA, despite improving conditions at home.

Milk production is growing by less than 1% a year, and consumption of cheese and butter is rising, the National Milk Producers Federation says.

But exports are hard going and low global power prices are also hurting.

Most states have a federal marketing order, which sets prices based on supply and demand and pays farmers based on how the milk is used.

The US price of Class I milk (liquid) was USD16.04/hundredweight (24p/litre) in January, down 13.7% on the year. Class IV (butter and powders) was up slightly at USD13.31/hundredweight (20p/litre). 

New Zealand

Only 5% of New Zealand milk, once processed, stays in the country.

This export focus means farmers are fully exposed to the world market and the Global Dairy Trade (GDT) auction, owned by New Zealand’s top processor Fonterra.

The co-operative has just updated its forecast farmgate price for the 2015-16 season to NZD3.90/kg milk solids (13-14p/litre).

After share earnings and retentions, farmers could get up to NZD4.45/kg (15-16p/litre).

Nearly all farmers will lose money with the worst returns since 2006-7, even with their low production costs.

Dairy is New Zealand’s second-biggest industry and the country’s central bank is running stress tests, to see what would happen if billions of dollars of loans have to be written off. 

See also: New Zealand dairy Fonterra pumps profits to struggling farmers


Aussie farmers have been partly sheltered from the global storms. Processors have been fighting for milk, and chasing added-value products such as UHT and infant formula.

Australian domestic demand has been good and the country’s currency has been weakening. The biggest processor, the co-op Murray Goulborn, has held its milk price at AUD5.60/kg milk solids (22-23p/litre) in February.

This was down from AUD6/kg (23-24p/litre) in 2015. But farmers’ margins are still under pressure, with higher grain and hay costs. This is one reason why milk production is forecast to fall 1-2% over the whole current season (July-June). 


Dutch dairy production has been surging since EU milk quotas ended last spring.

New records are being set as the year-on-year growth has been above 9% each month since June.

This expansion comes despite milk prices falling further still, as they have across Europe.

The average farmgate price was equivalent to 22.68p/litre in January, down more than 5% on the year.

Co-operative FrieslandCampina has a guaranteed milk price for March of €28.50/100kg (22-23p/litre), compared with €34/100kg (26-27p/litre) 12 months earlier.

This might be linked to a bullish attitude: FrieslandCampina’s last annual report expected pressure on markets for “some time” — but raved about the positive long-term outlook. 


Ireland’s dairy industry also rushed to a quick start after quotas ended.

Irish creameries bought 19.5% more milk in January than a year earlier.

But farmgate milk prices in Ireland fell more than in any other country over 2015.

First estimates suggest farmers were getting 22.82p/litre in January, down 13.9% on the year. There is not the spread of prices as in the UK, with the likes of Kerry, Glanbia, Lakeland and Dairygold paying similar rates.

As with the Dutch, Irish ambition could be helping farmers get through this tough time: the country is on track to raise milk production 50% by 2020. 


The EU’s biggest dairy producer is expanding — but not at the extreme pace of Northern Europe’s other nations.

Production throughout 2015 was almost 32bn litres, up 1.6% on the year before.

December’s milk output was 6.2% higher. Germany is plugged into European pricing, with the presence of the multinational co-ops Arla and FrieslandCampina keeping domestic processors competitive with their rates.

The average farmgate price was 22.28p/litre in January, down 8.4% on 2015. German farmers are divided about how to cope with the crisis.

The main union, the DBV, said the industry’s problems with be solved with more reliable, long-term pricing.

The radical European Milk Board, whose president is German, wants a new supply management system, to replace quotas. 


Canada’s dairy farmers have been protected for a long time.

A national commission runs a quota regime, sets provincial farmgate prices and limits imports.

This has kept prices fairly stable, even as the world market collapsed.

The country’s minimum milk prices rose in December, to reflect higher on-farm costs.

But these shields are starting to crack, due to Canada’s trade deals with Pacific nations and the EU. Farmers are hoping a promised CAD4.3bn (£2.3bn) compensation package reaches them.

Farmers in Quebec, the biggest milk producing province, received CAD68.58/hectolitre (37p/litre) in February, down from CAD73.27/hl (39p/litre) in 2015.


India’s dairy industry is hard to compare with the rest of the world — despite being the world’s biggest. The country is self-sufficient in dairy, producing 140bn litres of milk a year.

It is also protected from foreign imports, and most “farms” have one or two cows. But there are still links with the world market, especially through co-operative brand Amul, which trades on the GDT auction.

Those co-ops which focus on the liquid trade, where retail prices have been rising, have been able to cushion farmers. But others have suffered.

Farmers in Maharastra selling cow’s milk to private dairies are now paid about INR16/litre (16-17p/litre), against INR26 (27-28p/litre) in mid-2014.

Higher production has also pressured prices, as co-operative dairies bought 14% more milk between April and December 2015 than a year earlier. 


We often talk of China’s dwindling dairy demand, which helped world prices to crash. But some farmers in the People’s Republic have suffered too.

Early last year, state news agency Xinhua bemoaned the end of the “dairy boom”, as farms were closed, cows were culled and milk was fed to pigs.

Farmgate milk prices fell from CNY426/100kg (45-46p/litre) in February 2014 to CNY340/100kg (36-37p/litre) in spring 2015.

But prices have since picked up to about CNY356/100kg (38-39p/litre).

It’s hard to get a firm grasp of what’s happening.

China Modern Dairy, which owns 200,000 cows on 24 farms, boasts of booming growth. Last year plans were revealed for a 100,000-cow farm.

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