EU Dairy Farmers’ Gathering Shows Slower Production – Which Should Help Sustain Farmer Milk Prices

Speaking following this week’s Brussels-based COPA Milk Group meeting of Europe’s dairy farmer representatives, IFA National Dairy Chairman Tom Phelan stated his fellow-farmers had confirmed lower production trends into the autumn and winter, due to drought, fodder shortages and lower milk prices, which should influence dairy markets positively. Mr Phelan reported that most attendees predicted stable to firmer milk prices to year-end, and Irish co-ops should have the confidence to hold milk prices till then at least, too.

“At the meeting, our fellow-European farmer representatives told us that in France, drought and disappointing milk prices caused milk production to fall 4% in September and 5% in October. Dutch milk production is down 2.5% due to the phosphates restrictions, but also to a 10 to 20 % drought-related fodder shortage,” he said.

“German dairy farmers expect their 2018 output will be down 1.45% below 2017. In the UK, despite growth in Northern Ireland, overall supplies are stable. Finnish dairy farmers have lost half of their grass crop to the drought, and expect supplies to fall 0.5% this year, and by 1.1% next year. Production also fell in Austria, is expected to fall for the next 3 months in Italy, and while Poland continues to increase output, it is by a more modest 2% for the year to September,” he added.

“Clearly, the full impact of the drought is only transpiring after it has ended. Despite many countries reporting improved rainfall since August or September, the earlier dry spell continues to impact on fodder and the availability and cost of feed and grain,” he said.

“My conclusion is that many dairy farmers around Europe will struggle to sustain production with disappointing prices in the face of scarce fodder and high-priced feed. This means lower volumes for the next number of months, and scarcity always pushes up prices,” he said.

“In this context, co-ops can, and must, commit to holding their milk prices at least to year end,” he concluded.