Rabobank: European Dairy Industry Faces 20% Milk Production Decline by 2035
Source: The DairyNews
In a recent report by Rabobank, dairy farmers across north-western Europe, including Denmark, Germany, the Netherlands, and Belgium, are confronted with a daunting prospect: a potential 20% drop in milk production by 2035.
The report underscores the significant challenges looming over this region's dairy sector, driven by a structural decline in milk production. This decline not only threatens operational efficiency and financial stability but also exacerbates competition for milk resources.
Dairy co-operatives, already grappling with capital withdrawal by members, find themselves under additional strain. Despite a decade of robust growth following the removal of milk quotas and favorable economic conditions, the industry now faces headwinds such as weakened margins, environmental regulations, labor shortages, and climate volatility.
Looking ahead, Rabobank's projections paint a concerning picture, with milk production potentially plummeting by up to 20% by 2035. This stark decline could erase nearly all production growth witnessed since 2010.
Richard Scheper, an analyst at Rabobank, emphasizes the necessity for dairy companies to pivot towards high-value products like specialty proteins, branded consumer goods, and cheese. This strategic shift, he argues, is essential to offset rising costs and maintain market competitiveness amid surplus processing capacities.
Scheper stresses the importance of clear and consistent policy measures to facilitate a smooth transition towards more sustainable farming practices. Proactive measures, including consolidation, are urged to mitigate the impact of reduced milk volumes and navigate the evolving market dynamics.
As the dairy industry braces for transformative change, the imperative for dairy producers is clear: adaptability and strategic foresight are crucial to weathering the challenges ahead and securing a sustainable future.
Dairy co-operatives, already grappling with capital withdrawal by members, find themselves under additional strain. Despite a decade of robust growth following the removal of milk quotas and favorable economic conditions, the industry now faces headwinds such as weakened margins, environmental regulations, labor shortages, and climate volatility.
Looking ahead, Rabobank's projections paint a concerning picture, with milk production potentially plummeting by up to 20% by 2035. This stark decline could erase nearly all production growth witnessed since 2010.
Richard Scheper, an analyst at Rabobank, emphasizes the necessity for dairy companies to pivot towards high-value products like specialty proteins, branded consumer goods, and cheese. This strategic shift, he argues, is essential to offset rising costs and maintain market competitiveness amid surplus processing capacities.
Scheper stresses the importance of clear and consistent policy measures to facilitate a smooth transition towards more sustainable farming practices. Proactive measures, including consolidation, are urged to mitigate the impact of reduced milk volumes and navigate the evolving market dynamics.
As the dairy industry braces for transformative change, the imperative for dairy producers is clear: adaptability and strategic foresight are crucial to weathering the challenges ahead and securing a sustainable future.
