Challenges for Dairy Farmers

milk price increases 2022Prices have continued to move upwards since the start of the year. The European milk pool is shrinking at an unprecedented rate, with even strong performing countries last year, such as Ireland, starting to feel the pinch. Even though milk prices have risen significantly to reflect the increased costs farmers have been hit with, we are still not seeing much relief from the extreme price hikes.

The European Milk Board (EMB) are reporting that in Portugal prices have increased by 62% for diesel, 77% for maize and 140% for nitrogen fertilisers. In France energy costs have increased by 30% and fertilizer costs have increased by over 80% in the last year. Total milk production costs are calculated at around 53c/kg by the North Rhine-Westphalia Chamber for Agriculture in Germany.

This is a dire situation for many farmers in Europe who are forced to send their cattle for slaughter due to the spiraling costs evaporating their revenues. The situation is summed up by the EMB president Sieta Van Keimpema ‘This incredibly tense situation is currently forcing many farmers out of milk production and is eroding farming structures in the EU down to dangerous levels’. (Dairy Reporter)

The challenges farmers are dealing with is explained in more detail by Paul Tompkins who is the vice chair of the UK’s National Union of Farmers dairy board ‘It takes two and a half years to get a calf from being born on our farm to be actually producing milk and that incurs a lot of costs over those two years’. The rise in costs of both diesel and fertilizer are explained with diesel prices doubling from 63p per litre to £1.29 today. Fertilizer costs have went up from £315/ton to £930/ton which is an extra £60,000 in cost over the year for Oxfordshire farmer David Christensen. David goes on to describe the impact of these price hikes ‘These are big numbers. For many years we have absorbed smaller increases by becoming more efficient. The reality is when you get to these sort of numbers you can’t absorb, something has to give’. The stark difficulties facing farmers is clear to see and the sudden jolt in input costs is severely hampering everyone’s ability to operate. (Speciality Food Magazine)

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