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Farms Still Being Lost Through Milk Price War

11 September 2013

FRANCE - French dairy farming will continue to lose businesses unless milk pricing woes can be resolved.

New figures from the European Milk Board (EMB) peg average production costs at 43.03 cents per litre. This is 8 cents higher than the 35.25 cent average farmgate price.

Cost of production is outstripping farmgate price all across Europe and experts predict French production will focus in on the already established Grand Ouest region because of ‘chronic’ milk prices.

The Grande Ouest is the prime dairying region of France. It encompasses Brittany, Normandy and Pays de la Loire and lies to the west of the country.

While dairying is expected to intensify in this region, elsewhere analysts are predicting land abandonment, especially in the mountainous south-east of the country.

The prediction comes from data produced in a joint report between the EMB and the German dairy producer organisation MEG Milch Board.

The latest price/cost ratio indicates that price only covers 82 per cent of costs. This figure is from MEG Milch Board calculations as part of its Milk Marker Index.

Dairy leaders are aware that almost a year has passed since the ‘milk package’ was rolled out across Europe on October 3 2012 and are showing concerns that farmers are no better off.

EMB Chairman Ronald Schaber said that current figures ‘clearly reveal’ that the market situation is still tense and ‘will remain that way’. He added that this is despite a ‘gradual increase in prices’.

According to Mr Schaber, the current market situation ‘isn’t going to get better by itself’ and is to be addressed directly by an EMB price monitoring campaign.

Mr Schaber said: "The current available figures send a clear signal to all market participants and political decision-makers: the ratio between costs and price isn't healthy. If you don't want a dysfunctional milk market then you need to act."

The price monitoring campaign will use manufacturing costings which the EMB says will work as a basis for ‘fair milk prices’. 


Further Reading

You can view the full report by clicking here.

Michael Priestley

Michael Priestley
News Team - Editor

Mainly production and market stories on ruminants sector. Works closely with sustainability consultants at FAI Farms


Top image via Shutterstock

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