LThe milk flow slows down. From New Zealand to the United States, via Europe, milk collection is going from bad to worse. France is no exception to this decline. After a drop of 1.5% recorded in 2021, volumes still fell by 1.2% in the first quarter. No question, however, of waving the red rag of the shortage of the white beverage. Especially since the French are choosy about their breakfast bowl. According to Syndilait, the consumption of liquid milk is again drawing a downward curve, with a drop of 1.3%, to 2.28 billion liters in 2021, after the atypical peak of 2020, linked to the containment measures enacted at the start of coronavirus crisis.
But when the dairy engine grazes, world market prices for processed products ignite. “Industrial butter and skimmed milk powder are at extremely high levels. Butter trades at nearly 6,800 euros per tonne, and skimmed milk powder around 4,000 euros per tonne. An increase of almost 70% over one year”emphasizes Benoît Rouyer, director of economic forecasting at the National Interprofessional Center for the Dairy Economy.
Production costs are soaring
Enough to make butter for the big dairy manufacturers. And for breeders? The gunpowder sets the price of milk on fire. This overheating of world prices therefore results in a revaluation of the price paid to the farmer. In March, according to data published by the Ministry of Agriculture, a ton of conventional milk reached 395 euros on average, up 22% over one year. The movement continues. “ In May, a ton of milk reached 410 euros. If someone had told me, two years ago, that the price of milk was going to reach this peak, I would not have believed it”reacts Daniel Perrin, secretary general of the National Federation of Milk Producers.
Except that, for two years, between health crisis and invasion of Ukraine by Russia, the markets for agricultural raw materials have lost their bearings. Soaring prices for animal feed, cereals and meal, fertilizers and energy, have caused farmers’ production costs to soar. Even if the most autonomous in fodder absorb the shock better. French dairy farmers are watching with covetousness their German counterparts receiving 440 euros per tonne. The tension even went up a notch, when manufacturers announced their desire to pass on the increase in their processing costs in the price-setting formula, limiting the increase accordingly.
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