The study, What is the cost of producing milk?, was produced by the Bureau for Rural Sociology and Agriculture (BAL).
In addition to the milk production costs in eight EU milk-producing countries, the latest version of the cost study also includes an EU average for the very first time. In 2019, the average cost was 45.35 cents/kg, and with EU prices averaging 34.52 cents/kg, the EMB said this is a significant cost shortfall.
“This clearly shows a problematic imbalance throughout the EU,” said Sieta van Keimpema, president of the EMB.
With Ireland and Lithuania newly added to the BAL study, the EMB said the data show the opposite ends of the cost spectrum.
With its unique production system, Ireland, with 34.21 cents/kg, had the lowest production costs in 2019. However, the tendency of cost shortfalls is seen here as well, as costs have increased significantly in the period included in the study, but prices have not evolved accordingly, the EMB argued.
As a result, the EMB said costs were not covered in three of the five years included in the study, even in this country with extremely favorable conditions for milk production. Lithuania, with its differentiated farm structure and many small farms, tops the list with the highest production costs (58.63 cents/kg). Together with an extremely low milk price of 28.79 cents/kg, the EMB said producers in the Baltic country are struggling with an enormous cost shortfall of 51%.
The EMB said a look at two large milk-producing countries – the Netherlands and Denmark – shows once costs have been deducted, there is no income.
“We have to bear in mind that we are talking about the Netherlands and Denmark – countries with very modern farms that continue to take on new technical developments. But in spite of this, those running dairy farms are not left with a single penny in hand,” said van Keimpema.
The EMB said only Ireland manages to get somewhere close to what has been calculated as appropriate income.
Dr Karin Jürgens, author of the study, said, “Dairy farms are not just missing the earnings needed for stable and future-proof operations. They are not even making enough for an appropriate income or even an adequate living.
She said the income variable in the study considers the level of training and qualifications and is based on applicable agricultural collective agreements or twice the national minimum wage in the country in question.
Kjartan Poulsen, EMB vice-president, added, “How can it be acceptable for someone to earn nothing or close to nothing? We are a well-trained workforce with long-standing experience, and we work hard every day. That includes weekends and holidays. Especially during the pandemic, farmers left no stone unturned to ensure that there was never an issue with food supplies. Furthermore, we also undertake major risks and shoulder significant responsibility for our animals, for food security and for the environment.”
French dairy farmer and EMB executive committee member Boris Gondouin added, “I am very happy to have this new brochure with a very clear structure in hand, especially because it is a tool that is based on reliable, founded data. It allows me as a dairy farmer to comprehensively understand cost developments. And not just in my country.”
He has a recommendation for all dairy farmers: “Take this proof of production costs with you to every meeting with dairies, retailers and policy-makers and use it to demand fair prices!”
van Keimpema concluded, “The next generation, the future of food production, would also like to produce milk. Let’s use this study and, once again, make this viable for them!”
Jürgens said the study shows farms will only be in a position to contribute to the implementation of environmental, climate and animal welfare goals that imply higher costs if there are lasting improvements to their economic situation.
