Brussels, 04/03/2014 (Agence Europe) - The results of a cost study published on Monday 3 March show that the average price paid to dairy farmers in Germany in October 2013, i.e. 41.92 cents/kg, does not cover production costs. For the same period, production costs amounted to 44.12 cents/kg, thus revealing a gap of more than 2 cents per kilogramme.
The study was carried out by the German Office for Agriculture and Agricultural Sociology BAL at the request of the European Milk Board (EMB) and the German MEG Milch Board. It also shows different production costs in three different regions. In the southern region (Saarland, Bavaria, Baden-Württemberg, Rhineland-Palatinate, Hesse), productions costs amounted to 49.19 cents per kilogramme of milk, in the eastern region (Thuringia, Saxony, Saxony-Anhalt, Brandenburg, Mecklenburg-Vorpommern) to 42.93 cents/kg and in the northern region (North Rhine-Westphalia, Lower Saxony, Schleswig-Holstein) to 38.56 cents/kg.
Romuald Schaber, President of the EMB, underlined the great importance of constantly monitoring the market, especially the relationship between farm-gate prices and production costs. “But a monitoring agency set up on institutional level which would make adjustments on produced volumes in case of major shortfalls is equally important”, explains Schaber.
In October 2013, the price/cost ratio calculated by the MEG Milch Board revealed that costs were covered by 95 per cent, whereas for the whole of 2013 they were covered by only 87 per cent. “The current price situation has slightly improved”, continues Schaber. He points out, however, that that the milk market is characterised by strong price volatility. In 2012, the average milk price in Germany was slightly under 33 cents; two years before it was less than 26 cents/kg. Schaber concludes that, “under such price conditions, we have to react by adjusting supply, in order to guarantee the survival of milk production in all EU regions”. This volume adjustment index was not included in the milk package or in reform of common agricultural policy (CAP). (LC)