Riga, 02/06/2015 (Agence Europe) - It is still too early to say what the effects of the end of the production quota system will bring. Nonetheless, according to Mansel Raymond, the chairman of the milk workgroup at Copa-Cogeca, speaking on Tuesday 1 June in Riga, producers are currently finding the situation difficult.
He again called on the European Commission to examine the intervention price (currently €0.21) so that it is more appropriate to the situation on the ground (the rate of the price increase, however, was not mentioned).
Mansel Raymond repeated the fact that the money from the super levy (the amount paid by producers in the event of going above the milk quotas), estimated at €700 million this year, remains in the hands of the milk producers, particularly as a means of helping them locate new markets (the Russian embargo on EU agricultural products hit producers in this sector hard). He also indicated that the fall in animal feed prices meant that the sharp fall in prices could not be compensated.
Milk production also fell between January and March by 1.3% (with a 3.8% reduction in March). EU exports are bearing up well, he said, despite the Russian embargo. EU milk production accounted for 15% of the total value of the EU's agricultural production in 2013.
31 cents is not enough to cover the 46 cent production costs
In January 2015, average production costs for milk in Germany rose to 45.64 cents/kilogram of milk. This was highlighted in a recent study carried out by the German Milk Office (Büros für Agrarsoziologie & Landwirtschaft) or the BAL, on behalf of the European Milk Board (EMB).
With average milk prices of 31.03 cents/ kilogram, producers are having to confront a significant deficit. Therefore, in Germany, the price/cost ratio illustrates cost coverage of just 68%. EMB President, Romuald Schaber, believes that the situation is therefore still “very critical”. He repeated his wish to see a “Market Responsibility Programme (MRP)” introduced and explained that this programme is primarily based on voluntary cuts in production, which prevent overproduction in times of crisis and would allow “better milk prices for all dairy farmers in a fast and efficient way”. (Lionel Changeur)