EU dairy farmers are currently experiencing the lowest producer and dairy product prices in many years despite forecasts of a bright future for dairy during the past number of years due to the growing demand for dairy products in China, Asia and Africa. Several factors contributed to the perfect storm currently challenging the EU dairy industry. The Russian embargo on agricultural imports from the EU which was extended to June 2016 put downward pressure on dairy markets but did not deter EU dairy farmers to increase production.
The EU experienced high prices and demand for dairy products from 2009, with a brief lapse in 2012, which encouraged production growth in certain member states. During this time the EU Commission decided that the EU dairy production quota will end in 2015. Global dairy prices started going downward from March 2014 as a result of an oversupply of dairy products due to the Russian embargo and a significant decrease in world demand, China in particular. EU milk producers only started decreasing milk production from March 2015 which was too late. Thirteen EU member states are expected to incur “super levy” fines for exceeding their last national production quota – up to €800 million in 2015, compared to €409 million from eight member states in 2014. To read more click HERE.
Published on Monday, 24th August 2015 - 09:15
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