Thomas Lyons 
Dairy farmers in Europe are facing an impending financial crisis, warns the European Milk Board (EMB), which represents 100,000 milk producers. The EMB has cautioned that the significant decrease in producer prices in the dairy sector since the beginning of 2023 across Europe should not be seen as simply the “beginning of a market correction”. Instead, the lobby group believes that farmers need legislation at European Union (EU) level to ensure that producer prices should be higher than production costs. The EMB is calling for this to apply to all farmers across the EU, including those who are members of cooperatives. The EMB, which has members in 16 European countries including Ireland, highlighted that last year was an “exceptional year” for some dairy farmers but historically, the producer price does not match the cost of production.
Kjartan Poulsen, president of the EMB, has strongly advised against “downplaying” the effect of declining producer prices on the EU agricultural system. Poulsen said: “When prices fall well below production costs, it’s not a market correction, but a total exploitation of our farmers and our food system.” The lobby group has admonished the European Commission for showing “no signs” of taking the fall in producer prices seriously. The EMB has highlighted that in some countries such as Lithuania, more than 10 per cent of producers have left the milk production sector. Poulsen has queried whether the commission is really concerned that farmers are leaving dairy production.
The EMB believes that it is now time “to carefully study the market and to leverage all possibilities to prevent the growing significant market imbalance”. It has suggested that one measure to address this imbalance could be the implementation of an EU-wide “voluntary production reduction” immediately. The EMB has also advocated for the reform of the EU agricultural system towards a “socially-sustainable model” in the medium term. “We need a system that ensures appropriate prices and income for farmers, so that they can continue to produce food and to build a secure and sovereign food system for EU citizens,” the lobby group has urged.
According to the latest European Commission short term dairy outlook, the size of the overall EU dairy herd could shrink by 1% in 2023. It has also warned that a declining EU raw milk price is likely to lead to “increasing slaughterings” as feed and other input costs could remain high. The EMB has highlighted that in some countries, such as Lithuania, over 10% of producers have left the milk production sector due to the decline in producer prices. The EMB has called for the implementation of an EU-wide “voluntary production reduction” to address this imbalance. The lobby group has also urged for the reform of the EU agricultural system towards a “socially-sustainable model” in the medium term.
The EMB has emphasised that farmers need legislation at EU level to ensure that producer prices are higher than production costs. This should apply to all farmers across the EU, including those who are members of cooperatives. The lobby group has criticised the European Commission for not taking the fall in producer prices seriously, and has suggested that a voluntary production reduction could help to address the growing market imbalance. The EMB has also called for the reform of the EU agricultural system towards a “socially-sustainable model” in the medium term, to ensure appropriate prices and income for farmers and to build a secure and sovereign food system for EU citizens.
