Milk price drops threaten viability of small to medium sized producers

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While global issues inevitably influence milk price and dairy farmer viability, the end of the EU’s milk quota regime has made it especially challenging for small to medium sized dairy farmers to survive.

 Milk prices are below 30 cents per litre in many countries. Small to medium sized producers inevitably suffer with such a sudden price drop. For some, increasing acreage and expanding production by going further into debt is the only solution. But this is only a solution for the few, while also having social, environmental and economic consequences for Europe, and rural Europe in particular.

According to the Milk Market Observatory’s milk market bulletin from June 2015 “The weighted EU average farm gate milk price decreased in April 2015 by 0.8% to 31.3 c/kg, which is 18% lower than in April 2014 and 6% lower than the average of the last 5 years.”

Developments in China and the Russian food embargo have also shaped the price drop.

As the Western Daily Express reported on 10th June, this crisis has an impact on real people. Mark Oliver, chairman of the National Farming Union’s (NFU) South West Dairy Board  is selling his herd and quitting farming:

“Mark Oliver, who has been a spokesman for hard-pressed dairy farmers across the South West through the dairy crisis, is putting his 370 Holstein Friesian milking cows up for sale and giving up the tenancy on the farm at Lanhydrock, near Bodmin.

He said: “I have been farming all my life, I drove my first tractor when I was seven and I have no firm idea what I am going to do next.” Mr Oliver, 41, who comes from a long line of family farmers, said with commodity prices down across the board there was no point in switching sectors and it was better to get out altogether.

But he admitted it would be a wrench. “I am going to miss milking the cows,” he said. “But I am not going to miss all the hassle and the hard work for no return.””

On 16th April 2015, the Committee of Regions (CoR) adopted an own-initiative opinion on the future of the European dairy sector. It  called for a new type of regulation to follow up on the milk quota system abolished since 1st April 2015. The Committee of the Regions’ opinion called  in particular for:

  • Measures to secure an income to all producers
  • Producer organisations with greater negotiating power
  • Improving the workings of the European Milk Market Observatory
  • Assess the Market Responsibility Programme put forward by the EMB as to its feasibility
  • Expanding the use of contracts to cooperatives to cover the entire dairy industry.

Certainly, without some sort of action, European dairy will become increasingly difficult for small to medium sized producers.

European Milk Board’s Market Responsibility Programme (MRP)

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Milk prices down in the UK and Ireland

Milk price down 30% (1oc per litre) in one year in Ireland.

Oliver Moore
About Oliver Moore 188 Articles
DR. Oliver Moore is the communications director and editor-in-chief with ARC2020. He has a PhD in the sociology of farming and food, where he specialised in organics and direct sales. He is published in the International Journal of Consumer Studies, International Journal of Agricultural Resources, Governance and Ecology and the Journal of Agriculture, Food Systems, and Community Development. A weekly columnist and contributor with Irish Examiner, he is a regular on Countrywide (Irish farm radio show on the national broadcaster RTE 1) and engages in other communications work around agri-food and rural issues, such as with the soil, permaculture, climate change adaptation and citizen science initiative Grow Observatory . He lectures part time in the Centre for Co-operative Studies UCC                                                                                                                                                                                                                     Oliver voyage beaucoup moins qu’auparavant, pour ce qui concerne son activitĂ© professionnelle. Il peut nĂ©anmoins admirer par la fenĂŞtre de son bureau les mĂ©sanges charbonnières et les corbeaux perchĂ©s au sommet du saule dans le jardin de sa maison au cĹ“ur de l’écovillage de Cloughjordan, en Irlande. L’écovillage est un site de 67 acres dans le nord du Tipperary. Il comprend d’espaces boisĂ©s, des paysages comestibles, des lieux de vie, d’habitation et de travail, ainsi qu’une ferme appartenant Ă  la communautĂ©. Les jours oĂą il travaille dans le bureau du centre d’entreprise communautaire, il profite d’une vue sur les chevaux, les panneaux solaires, les toilettes sèches et les jardins familiaux.  Ce bureau au sein de l’écovillage constitue en effet un tiers-lieu de travail accueillant Ă©galement des collaborateurs des associations Cultivate et Ecolise, ainsi qu’un laboratoire de fabrication (« fab lab »).  Oliver est membre du conseil d’administration de la ferme communautaire (pour la seconde fois !) et donne Ă©galement des cours sur le Master en coopĂ©ratives, agroalimentaire et dĂ©veloppement durable Ă  l’University College Cork. Il a une formation en sociologie rurale : son doctorat et les articles qu’il publie dans des journaux scientifiques portent sur ce domaine au sens large. Il consacre la majoritĂ© de son temps de travail Ă  l’ARC 2020. Il collabore avec ARC depuis 2013, date Ă  laquelle l’Irlande a assurĂ© la prĂ©sidence de l’UE pendant six mois. C’est lĂ  qu’il a pu constater l’importance de la politique agroalimentaire et rurale grâce Ă  sa chronique hebdomadaire sur le site d’ARC. Après six mois, il est nommĂ© rĂ©dacteur en chef et responsable de la communication, poste qu’il occupe toujours aujourd’hui. Oliver supervise le contenu du site web et des mĂ©dias sociaux, aide Ă  dĂ©finir l’orientation de l’organisation et parfois mĂŞme rĂ©dige un article pour le site web.  Ă€ l’époque oĂą on voyageait davantage, il a eu la chance de passer du temps sous les tropiques, oĂą il a aidĂ© des ONG irlandaises de commerce Ă©quitable – au Ghana, au Kenya, au Mali, en Inde et au Salvador – Ă  raconter leur histoire.  Il se peut que ces jours-lĂ  reviennent. Pour son compte Oliver continuera de prĂ©fĂ©rer naviguer en Europe par bateau, puis en train. Après tout, la France n’est qu’à une nuit de navigation. En attendant, il y a toujours de nombreuses possibilitĂ©s de bĂ©nĂ©volat dans la communautĂ© dans les campagnes du centre de l’Irlande.