EU Dairy Farmers Miss Covering Costs by 6% in 2023, Says EMB
Source: The DairyNews
In 2023, dairy farmers across the European Union fell short of covering their costs by 6%, according to the European Milk Board (EMB). This deficit highlights a continuing struggle for profitability within the sector.
The EMB, comprised of dairy farmer representative organizations including the Irish Creamery Milk Suppliers’ Association (ICMSA), reported that the average cost coverage rate for EU dairy farmers over the past five years was only 88%. This figure underscores the financial challenges faced by farmers, despite subsidies and farmgate milk prices.
During the first meeting of the newly established Agriculture and Food Chain Observatory (AFCO) – initiated by the European Commission in response to farmer protests earlier this year – the EMB emphasized the need for "fair calculation methodologies" to accurately determine production costs. The meeting aimed to establish a framework for these methodologies.
The EMB pointed out that since 2017, cost coverage for dairy farmers has consistently fallen short, with the shortfall ranging fr om 22% in 2018 to 6% in 2023. The only year wh ere costs were fully covered was 2022.
Commenting on these figures, EMB president and Danish dairy farmer Kjartan Poulsen stressed the importance of using this information to introduce measures ensuring producer prices cover full costs. The EMB has commissioned research to better inform the sector and the public about prices and costs, advocating for a calculation methodology that represents fair income for producers.
EMB vice-president Elmar Hannen expressed willingness to share their fair calculation methodology with the EU to make progress on cost coverage issues. He emphasized that the observatory's ultimate goal is to improve the position of producers along the value chain. Hannen warned that the exodus of farmers from the sector and the lack of profitability for new entrants threaten EU food production.
The EMB urged the European Commission to chair the observatory to ensure constructive outcomes and avoid inconsequential results. Hannen called for identifying and addressing non-constructive contributions from stakeholders uninterested in improving producer positions.
Poulsen warned of potential EU-wide protests if future reform proposals by the European Commission do not address these critical issues. "Farmers will not stand for this any longer. They are closely watching the observatory and future reforms," he said.
During the first meeting of the newly established Agriculture and Food Chain Observatory (AFCO) – initiated by the European Commission in response to farmer protests earlier this year – the EMB emphasized the need for "fair calculation methodologies" to accurately determine production costs. The meeting aimed to establish a framework for these methodologies.
The EMB pointed out that since 2017, cost coverage for dairy farmers has consistently fallen short, with the shortfall ranging fr om 22% in 2018 to 6% in 2023. The only year wh ere costs were fully covered was 2022.
Commenting on these figures, EMB president and Danish dairy farmer Kjartan Poulsen stressed the importance of using this information to introduce measures ensuring producer prices cover full costs. The EMB has commissioned research to better inform the sector and the public about prices and costs, advocating for a calculation methodology that represents fair income for producers.
EMB vice-president Elmar Hannen expressed willingness to share their fair calculation methodology with the EU to make progress on cost coverage issues. He emphasized that the observatory's ultimate goal is to improve the position of producers along the value chain. Hannen warned that the exodus of farmers from the sector and the lack of profitability for new entrants threaten EU food production.
The EMB urged the European Commission to chair the observatory to ensure constructive outcomes and avoid inconsequential results. Hannen called for identifying and addressing non-constructive contributions from stakeholders uninterested in improving producer positions.
Poulsen warned of potential EU-wide protests if future reform proposals by the European Commission do not address these critical issues. "Farmers will not stand for this any longer. They are closely watching the observatory and future reforms," he said.
