Too much milk on the market
Dairy farmers call for state aid
06/10/2023 11:16 am
Last year milk prices rose and many farmers increased their production. The additional quantities push the price down again. Discounters make dairy products cheaper. Farmers are sounding the alarm. Indicators are now pointing to slightly rising prices again.
The German dairy farmers are demanding state aid from the Federal Minister of Agriculture, Cem Özdemir, against overproduction. “Agriculture Minister Özdemir must declare the crisis and call for a reduction in milk production,” said the chairman of the Association of German Dairy Farmers (BDM), Karsten Hansen, of the “Bild” newspaper. “In return, there must be appropriate compensation from the EU crisis fund.” Compensation of 14 cents per liter of milk not produced is “appropriate,” said Hansen.
According to the newspaper, the Dairy Industry Association (MIV) expects almost a billion liters too much raw milk to be produced in Germany for the year as a whole. The price pressure in the market is so great “that the discounters have already brought their price negotiations forward by a month,” said MIV CEO Eckhard Heuser of “Bild”. “Prices for dairy products will not fall any further until Christmas.” The butter price could fluctuate further. Heuser was confident that dairy farmers will achieve an average price of more than 40 cents per liter throughout 2023. “Historically, that is still very high,” Heuser told the newspaper.
There is much to be said for “firmer prices” in autumn
According to the MIV, the fact that the prices for dairy products have started to slide is due to the currently large supply in Germany and Europe. In view of the high prices last year, many farmers increased production, said the association’s general manager, Eckhard Heuser. Loud Federal Agency for Agriculture and Food a total of 31 million tons of milk were delivered to German dairy companies last year. Compared to 2021, the total amount remained stable – it fell slightly from conventional production, while it increased from organic production. Meanwhile, there was a clear increase in deliveries from producers from EU countries.
However, the easing in milk prices could be short-lived. There are many indications that the market will calm down in the coming months and that “firmer prices” can be expected again in the autumn, said Heuser. Which would mean that consumers would probably have to dig a little deeper into their pockets for milk and cream.
According to the industry portal agricultural today the milk price paid by the dairies was constantly over 40 cents per liter last year and peaked between April and September, sometimes well above the 60 cent mark. Currently, however, the threshold of 40 cents is not exceeded everywhere. However, the first indicators are pointing to a slight increase in prices again and are signaling revenues of more than 40 cents again for December.