Dairy Industry and Farmers Negotiate Milk Prices in Spain

The dairy industries, alongside individual farmers and producer organizations like Agaprol, are finalizing their negotiations for the renewal of milk supply contracts for the coming months. Unlike in previous times when the dairy sector led agrarian movements, current negotiations are carried out with discretion, involving fewer participants.

The industry advocates for price stability, currently averaging around €0.49 per liter, suggesting minor increases, which are about three to four cents above the EU average. On the other hand, producers demand prices that cover production costs, estimated to average around €0.55. These negotiations are impacted by factors like feed costs, labor, and especially energy expenses.

Roman Santalla from the Union of Small Farmers (UPA) emphasizes that prices must not fall below production costs. He highlights the necessity for the sector to embrace technology and competitiveness, requiring significant investments sustained by profits from dairy sales. Producers are also calling for adherence to the Food Chain Law, emphasizing the role of major distributors in creating field value versus mass production.

The sector faces a severe generational gap, with only 4% of farmers aged between 25 and 34 years, while 39% are aged 55 to 65. This deficit poses challenges for sustaining farm management that requires constant commitment. Larger farms run by investment funds or agri-food enterprises often fill this void.

Despite a 2.4% decrease in animal numbers to 762,000, genetic advancements have maintained production levels, fulfilling just below local demand with external imports. Risks such as diseases affecting livestock in key producing countries like Germany could further influence supply and prices.